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Chapter 3 HMWK

  1. What surprised you most about the concepts in this chapter?  Why?
  2. What is your opinion about international trade?  Overall is it good or bad?  Why?
  3. Did your opinion about trade change after reading the chapter? Go back to your thoughts on the buy local movement in your first reflection.  Can we think about trade with China and trade with Wyoming in the same way? Why or why not?
  4. Give an example of a recent purchase you made that was primarily produced overseas.  Was there a locally produced option? How much more would you be willing to pay for the locally produced option? Why?  If you did pay more, was there a trade-off?

The thing that stood out to me in this chapter was the interplay between absolute advantage and comparative advantage. The illustration of Serena Williams giving up a $30,000 TV commercial just because she can mow the lawn better than anyone else doesn't mean she should. I also like the story about splitting up household chores to equalize effectiveness on the final task each person is doing.

International trade is good because it allows those who are most efficient at certain types of production to leverage that in trade. When production increases, so should wages for workers. And trade also helps reduce the opportunity cost for the trade partners who choose to consume the product.

One of my first comments in response to the international garment industry was based more on concern for working conditions in a factory than on overall economic well-being. After watching a 'fair trade' video, I realized that job may very well be the better option for some people.

I'm not sure how closely related trade with China and trade with Wyoming are. It seems that if it is more efficient, it shouldn't matter who you trade with. It seems that most objections to international trade are political...and in the end it means that we may have to work harder to produce the same product locally.

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