PLCY 110 Lecture Notes - Lecture 7: Catgut, Economic Surplus, Offshoring
Document Summary
Globalization: international flow of ideas and knowledge, sharing of cultures, global civil society, global environmental movement (stiglitz pg. Economic globalization: integration of countries through increased flow of goods and services, capital, and labor (ibid) Commodities: goods with no differentiation across markets. Free trade: no restrictions on imports/exports, no protectionist policies, dictated entirely by the market. Fair trade: better conditions for workers in developing countries. Often see a public demand for private companies to do something about fair trade. Absolute advantage: the ability of an individual, firm, or country to produce more of a good or service than competitors using the same amount of resources. Comparative advantage: the ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than other producers. Theory: even if one country is worse at producing everything, two countries can still benefit from trade because of differing opportunity costs.
