Download Recognizing International Trade Terms and Concepts as a Word

Lesson Title:
Recognizing International Trade Definitions and Concepts
TEKS:
119.12c.5A
Objectives:
TSWBAT (The student will be able to…..)
 Define terms important in discussing international trade
given written questions with no errors.
 Differentiate between exports and imports given written
questions with no errors.
 Explain the difference between comparative advantage
and absolute advantage given written questions with no
errors.
 Identify potential gains from international trade of
agricultural products given written questions with no
errors.
Teaching Materials and Resources:
 Power Point Presentation --- tradedef.ppt
 World Map
 Agricultural Commodity Symbols --- symbols.html
 Quiz --- defquiz.html
Teaching Procedures:
Interest Approach/Motivator
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Show the following statements as part of the power point presentation:
 U.S. trade with Mexico and Canada is up as a result of NAFTA.
 Agriculture accounts for 7% of Malaysia’s GDP.
 Per capita consumption of rice in Indonesia is 1,600 pounds per year.
 Exports to China were down in 1999 due to lasting impacts of the Asian
economic crisis.
 France has declared a ban on imports of beef products from Argentina due to
recent FMD outbreaks.
Ask students if they would understand what was being said if they were to read
these comments in a newspaper article.
Explain that these terms are important in understanding international agricultural
trade, this week’s unit.
Today We Will…
• Define terms important in discussing international trade
• Differentiate between exports and imports
• Explain the difference between comparative advantage and absolute
advantage
• Identify potential gains from international trade of agricultural products
Presentation
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Use power point presentation to keep main points visible to students at all times and
supplement discussion and lecture.
Define and explain the following terms:
 Trade - an exchange of products
 Why would we want to be involved in trade?
 It allows you to buy goods unavailable locally
 Such as products that aren’t in season in your area or products
that can’t be grown in your area due to climate
 Export - a good transported away from the area
 Import - a good transported into the area
 Domestic - relating to one’s own country
 Commodity - an economic good produced by agricultural or mining industries
 Most commonly refers to products marketed in bulk or raw products
 What would be some examples?
 GDP - Gross Domestic Product - total value of a nation’s annual output of
goods and services
 Per capita - per person
 Comparative Advantage -a nation will specialize in the production and
export of goods that they can produce cheaper than other countries due to
their favorable conditions or available resource
 What are some things that may determine whether or not a country
has comparative advantage for a certain product?
 Soil conditions, climate, government regulation, labor,
mechanization, etc.
 Countries, states, or areas, will raise the crop that provides the
most profit given their available resources
 Other countries abandoning less profitable enterprises also
contributes to comparative advantage and a lower price of all
goods.
 For example, Austria and Hungary both produce sugar beets and
potatoes.
 Locate both countries on the map and be sure to place
the commodity symbols on that country
 Austria can produce sugar beets for $0.50 per pound and potatoes
for $0.30 per pound. Hungary can produce sugar beets for $0.45
per pound and potatoes for $0.15 per pound. Hungary will decide
to specialize in the production of potatoes because that is the
product they stand to profit most from, given their available
resources. Therefore, Austria will be able to specialize in the
production of sugar beets. As a result of this specialization, Austria
will import potatoes from Hungary for $0.25 per pound and Hungary
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will import sugar beets from Austria for $0.35 per pound. Everyone
will benefit.
 Absolute Advantage - a nation will export goods certain goods because it
can produce it cheaper than all other nations or other nations are unable to
produce it
Ask students what they think could be possible benefits or gains from trade.
Share the following gains from trade and explain how these things benefit countries
involved in trade.
 Specialization in Goods of Efficient Production --- a country can do a better
job of producing what it can produce efficiently and not waste time and money
producing something that someone can produce more efficiently
 Gain from Exchange of Goods --- exporting products will provide revenue for
the country and it can save money by importing less costly goods of another
country for a product which it doesn’t produce effectively
 High Quality Goods --- the product of a country that specializes in that
commodity will be highest
 Diversity of Selection --- allows countries to expand their diet by adding foods
that they are unable to produce in their area
 Higher Export Prices --- if another country isn’t producing your commodity,
you’ll be able to sell it for a higher price in that country
 Lower Import Prices --- because that country is producing the commodity
more efficiently than you, you’ll be able to import it for less than you could
produce it
 Increases Standard of Living --- increased revenues and enables a more
diverse diet
Application
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Show the statements from the beginning of the lecture again and have the students
rewrite them in their own words to reflect the new terms that they’ve learned.
Evaluation
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Have students complete the on-line quiz (defquiz.html) and submit it to the teacher
via email.
References:
Agriscience 101 Supplement by TAMU IMS
TAMU AGEC 452 Supplement by Dr. Parr Rosson
CIA World Factbook (on-line)