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comparative advantage and free trade

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comparative advantage.notebook
PRINCIPLE OF COMPARATIVE ADVANTAGE
Lesson objective
1) understand the meaning of comparative advantage and
numerically demonstrate comparative advantage
2)understand the meaning of free trade
3) use the trading possibility curve to demonstrate the gains
from specialisation and trading
comparative advantage.notebook
key terms
comparative advantage: This is a situation where a country can
produce a product at a lower opportunity cost than another
country
comparative advantage.notebook
1) From the table determine which country has absolute advantage in the
production of
a) shirts
b) coats
2) from the table determine which country has comparative advantage in the
production of
a) shirts
b) coats
comparative advantage.notebook
use the link to understand how to calculate
domestic opportunity cost ratio. https://
www.youtube.com/watch?v=Okc8Il_CUSA
comparative advantage.notebook
Activity two
international trade is based on the pricnciple of
comparative but explain why comparative
advantage is not a sufficient explanation of the
current pattern of global trade
comparative advantage.notebook
Activity 3
self assessment task 4.9 page 103
comparative advantage.notebook
Key term
Free trade: This refers to international trade not restricted
by tariffs and other protectionist measures
Trading possibility curve: This is a diagram showing the
effects of a country specialising and trading
comparative advantage.notebook
Activity 1
what are the benefits of free trade?
comparative advantage.notebook
Trading possibility curve
Interpret the information carried by this graph
comparative advantage.notebook
Activity two
what information does the trading possibility
curve below provide
comparative advantage.notebook
Group activity
self­assessment task 4.10 page 105
comparative advantage.notebook
conclusion
In two sentences , write the what you learnt
from this lesson.
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