Trade enables countries to move beyond their previous resource and productivity constraints.
The Basis for Trade
Introduction and Alignment
Trade enables countries to move beyond their previous resource and productivity constraints. When countries specialize in producing those goods in which they have a comparative advantage, they maximize their combined output and allocate their resources more efficiently.
Upon completion of this assignment, you should be able to:
Demonstrate the importance of comparative advantage in the allocation of resources.
Incorporate biblical and ethical principles into economic theory and practice.
Resources
Bible
Website: http://www.biblestudytools.com
Website: http://www.khanacademy.org
Textbook: Economics for Managers
Media: Chapter 3 Animations
File: Workshop Two Chapter 3 Animation Transcripts
Video: Comparative Advantage: https://www.khanacademy.org/economics-finance-domain/microeconomics/choices-opp-cost-tutorial/gains-from-trade-tutorial/v/comparative-advantage-and-absolute-advantage
Background Information
The basis for trade is determined via comparative advantage. A country enjoys an absolute advantage over another country in the production of a product if it uses fewer resources to produce that product than the other country does. A country has a comparative advantage in the production of a product if it can produce that product at a lower opportunity cost in terms of other goods.
Ancient Babylon was a center of trade. The city is mentioned in the Bible as early as Genesis 11 in the description of the tower of Babel and finally in the book of Revelations. Babylon becomes a symbol of idolatry and pride leading to its destruction. As you study the basis of trade today, you should also understand how trade is laced into the Bible.
Instructions
Before you begin this assignment, read Chapter 3 in Economics for Managers.
Watch the following animations. To move through the animation sequence, click Nextuntil you reach the end of that animation sequence. These animations will prepare you for the discussions and other assignments in this and upcoming workshops.
Animation 3.5
Animation 3.6
Animation 3.7
Animation 3.8
Also watch the Comparative Advantage video at https://www.khanacademy.org/economics-finance-domain/microeconomics/choices-opp-cost-tutorial/gains-from-trade-tutorial/v/comparative-advantage-and-absolute-advantage.
Navigate to the threaded discussion and respond to the following:
What is the basis for trade (absolute or comparative advantage)?
How can an individual or a country gain from specialization and trade? (Please use an example.)
How was traded affected by the pride and idolatry of Babylon? Refer to your Bible and Internet Bible commentary found at http://www.biblestudytools.com.
Your initial post is due by the end of the fourth day of the workshop.
Read and respond to at least two of your classmates’ postings, as well as all follow-up instructor questions directed to you, by the end of the workshop.
Your postings should also:
Be well developed by providing clear answers with evidence of critical thinking.
Add greater depth to the discussion by introducing new ideas.
Provide clarification to classmates’ questions and provide insight into the discussion.
Click here to access the discussion topic.
Answer preview trade enables countries to move beyond their previous resource and productivity constraints.
APA
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