Economics 5/17 Extra Credit

2.1. We must make choices because we live in a world of scarcity, which means that although our wants are _unlimited_____, the resources available to fulfill those wants are ____limited___.

3. Trade-offs force society to make choices when answering the following three fundamental questions:

3.1. _What__goods and services will be produced?

3.2. _How__ will the goods and service be produced?

3.3. _Who___will receive the goods and services produced?

3.4. The  __opportunity cost__ ___ of any activity-such as producing a good or service-is the highest-valued alternative that must be given up to engage in that activity.

3.5.1. What is the chapter title and what does it mean? “Comparative Advantage and The Gains from International Trade” what the title means is we will see how important international trade can be to us. The title tells us what comparative advantage is and it shows what is beneficial about international trade.

3.5.2. What does the introduction tell you?  The introduction tells you how important trade can be with other people. The introduction also tells you how the United States gets benefits interacting with other countries and we get good prices by trading with other countries.

3.5.3. What kinds of picture, charts and/or graphs are in the chapter?  There is a picture of president Obama, there is a graph explaining how international trade  is increasing importance to the United States, there is a graph showing the eight leading exporting countries, graph comparing exports and imports as a percentage of GDP, and a pie chart on how caterpillar depends on international trade.

3.5.4. What does the summary at the end tell you about what the chapter will be about? The summaries state the chapter will be about how international trade has been increasing in recent decades. Comparative advantage is the ability of an individual, a business, or a country to produce a good or service at the lowest opportunity cost. Autarky is a situation in which country does not trade with other countries. Free trade is trade between countries without government restrictions.

3.5.5. What are important titles and subtitles from the reading selection? “The Importance of Trade to the U.S Economy” “How Countries Gain from International Trade” “Where does Comparative Advantage Come From?” “Tariffs” “The Arguments over Trade Policies and Globalization”

3.5.6. Write “Who, What, Where, and Why” questions for the main topics in the selection. Who benefits from international trade? What are opportunity costs? Where can we find tariffs? Why is raising and lowering prices important to a good or service?

3.5.7. As you read, write answers to your questions

Anyone who participates in international trade will get a better buy off. Opportunity costs is the highest valued alternative that must be given to engage in an activity. Tariffs are taxes. Raising prices is good for the producer to make money. But, lowering prices is good for the consumer, there have to come to a median.