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Trade Choices

Trade Choices. You have $1,000 to spend and your alternatives are: Purchase 1 U.S.-made television and 1 U.S.-made bicycle. or Purchase 1 Chinese-made television, 1 Korean-made bicycle and 2 cases of French wine. or Purchase $1,000 of stock in a Canadian company.

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Trade Choices

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  1. Trade Choices You have $1,000 to spend and your alternatives are: • Purchase 1 U.S.-made television and 1 U.S.-made bicycle. or • Purchase 1 Chinese-made television, 1 Korean-made bicycle and 2cases of French wine. or • Purchase $1,000 of stock ina Canadian company. Which do you choose?

  2. Voluntary Trade Creates Wealth

  3. Example 1

  4. Example 1

  5. Win - Win

  6. Win – Win ?

  7. Win – Win ??

  8. Win – Win ???

  9. Apples and Oranges Trade & Comparative Advantage – Example • Apple price $.70/lb • Orange Price $.70/lb • Washington Grower • 20 acres yields • Apples 50 bu/acre • Oranges 1bu/acre • Florida Grower • 20 acres yields • Apples 2bu/acre • Oranges 40 bu/acre

  10. Top 10 U.S.Trade Partners, Total Trade, Year to Date (May, 2014) US$, bn, unrevised http://www.census.gov/foreign-trade/statistics/highlights/top/top1405yr.html

  11. U.S.Trade, Imports & Exports, Year to Date (May, 2014) US$, bn, unrevised http://www.census.gov/foreign-trade/statistics/highlights/top/top1405yr.html

  12. U.S.Trade Surplus & Deficit, Year to Date (May, 2014) US$, bn, unrevised http://www.census.gov/foreign-trade/statistics/highlights/top/top1405yr.html

  13. http://www.census.gov/foreign-trade/data/index.html

  14. Balance of Payments

  15. Example

  16. The Data

  17. The Data

  18. The Balances

  19. Trade Deficit

  20. International Comparisons of Hourly Compensation Costs in Manufacturing

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