opportunity cost review
DESCRIPTION
Opportunity Cost Review. Take 2 minutes: What does “there is no such thing as a free lunch mean” to you?. Opportunity Cost Review. Opportunity Cost: the next best alternative Trade-off: Any alternative that must be given up. NMHS Menu. Nachos Peanut Butter and Jelly Sandwich - PowerPoint PPT PresentationTRANSCRIPT
![Page 1: Opportunity Cost Review](https://reader036.vdocuments.site/reader036/viewer/2022062314/56814524550346895db1e996/html5/thumbnails/1.jpg)
Opportunity Cost ReviewTake 2 minutes: What does “there is
no such thing as a free lunch mean” to you?
![Page 2: Opportunity Cost Review](https://reader036.vdocuments.site/reader036/viewer/2022062314/56814524550346895db1e996/html5/thumbnails/2.jpg)
Opportunity Cost ReviewOpportunity Cost: the next best
alternativeTrade-off: Any alternative that must
be given up
![Page 3: Opportunity Cost Review](https://reader036.vdocuments.site/reader036/viewer/2022062314/56814524550346895db1e996/html5/thumbnails/3.jpg)
NMHS MenuNachosPeanut Butter
and Jelly Sandwich
Chicken FingersCaesar saladHam and cheese
sandwich
Rank your choice from 1-5
What was your opportunity cost?
What was your trade-off?
![Page 4: Opportunity Cost Review](https://reader036.vdocuments.site/reader036/viewer/2022062314/56814524550346895db1e996/html5/thumbnails/4.jpg)
Opportunity Cost ReviewWhat does there is no such thing as
a free lunch mean to….1. Georgia?2. Other Competing States?
![Page 5: Opportunity Cost Review](https://reader036.vdocuments.site/reader036/viewer/2022062314/56814524550346895db1e996/html5/thumbnails/5.jpg)
Notes –Comparative v. AbsoluteSSEIN1a- Define and compare
absolute and comparative advantageSSEIN1b-Explain that most trade
takes place b/c of comparative advantage
![Page 6: Opportunity Cost Review](https://reader036.vdocuments.site/reader036/viewer/2022062314/56814524550346895db1e996/html5/thumbnails/6.jpg)
What is trade?Trade is the voluntary exchange of
goods and services.
![Page 7: Opportunity Cost Review](https://reader036.vdocuments.site/reader036/viewer/2022062314/56814524550346895db1e996/html5/thumbnails/7.jpg)
Voluntary ExchangePeople only exchange goods and
services when it benefits them OR marginal benefits outweigh marginal costs
When costs are greater than the benefits people stop tradingBoth parties
gain!
![Page 8: Opportunity Cost Review](https://reader036.vdocuments.site/reader036/viewer/2022062314/56814524550346895db1e996/html5/thumbnails/8.jpg)
Exports and ImportsExport: Goods that
a nation sells to other countries
Import: goods that a nation buys from other nations
Net Exports: (x-m)Exports-imports
![Page 9: Opportunity Cost Review](https://reader036.vdocuments.site/reader036/viewer/2022062314/56814524550346895db1e996/html5/thumbnails/9.jpg)
Types of advantagesComparative Advantage
Absolute advantage
Producing a good because you have a lower opportunity cost.
You can produce a good with fewer resources than another country.
This means you can produce more goods and services more efficiently than another country.
![Page 10: Opportunity Cost Review](https://reader036.vdocuments.site/reader036/viewer/2022062314/56814524550346895db1e996/html5/thumbnails/10.jpg)
Comparative AdvantageComparative advantage allows
countries to specialize. It is what we use to decide who
should produce products and who they should trade with.
![Page 11: Opportunity Cost Review](https://reader036.vdocuments.site/reader036/viewer/2022062314/56814524550346895db1e996/html5/thumbnails/11.jpg)
Benefits of TradeBenefits
1. Increase in
competition
2. Increases the variety of goods
and services
3. Spreads knowledge
and education
4. Spreads new
technologies and
production methods
When countries specialize and trade it leads to an increase in the supply and variety of goods and services available
to consumers.
![Page 12: Opportunity Cost Review](https://reader036.vdocuments.site/reader036/viewer/2022062314/56814524550346895db1e996/html5/thumbnails/12.jpg)
It is the difference between the exchange of exports and imports for a country
Exports - Imports= Balance of Trade
Balance of Trade
Favorable balance
Exports > Imports
Unfavorable Balance
Imports > Exports
![Page 13: Opportunity Cost Review](https://reader036.vdocuments.site/reader036/viewer/2022062314/56814524550346895db1e996/html5/thumbnails/13.jpg)
Balance of Payments: the difference between money a country pays for exports receives for imports
In other words, it is a record of all transactions that occur because of trade.
Balance of Payments
![Page 14: Opportunity Cost Review](https://reader036.vdocuments.site/reader036/viewer/2022062314/56814524550346895db1e996/html5/thumbnails/14.jpg)
Trade Deficit (negative trade balance): occurs when a country pays more for imports that it makes on exports
Trade Surplus (positive trade balance): occurs when a country earn more on exports than it pays for imports
Trade Values