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Lecture

ECON 101 NOTES: Trade

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Department
Economics
Course
ECON101
Professor
Alexander Gainer
Semester
Fall

Description
TRADE - Interdependence- Interaction between many people for the consumer to buy the product Ex. If you buy a cup of coffee from a coffee shop, the coffee shop most likely didn’t grow the coffee beans in their backyard. The coffee beans were probably grown in another country by somewhere else, and imported to yours by the pilot that flew the plane, and all the people in between that helped ship the coffee beans. Therefore, by the interactions between the many people to get a product to the consumer, people become interconnected, and this interaction is called interdependence. When a country is self-sufficient it means there is no trade. Ex. You own a farm and you grow your own blueberries and you sell those to your customers. - Export- When a product is produced in the country and sold abroad - Import- When a product is produced in another country (abroad) and sold domestically - Total amount consumed- Sum of all produced, imported and exported - The new point on the Production Possibilities Frontier (as explained in the introduction of economics) will be outside because no domestic hours are used for products imported. Ex. If Canada takes 10 hours to harvest 1 ton of apples and 100 hours to make 1 car the production possibility frontier will look like the graph below. 1.2 1 0.8 0.6
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