ntroduction: The purpose of this activity is to reflect on the principle of comparative advantage and better understand how the patterns of global trade are shaped by this fundamental concept. You will watch and read the story of a t-shirt that was manufactured using resources from four separate countries. Next, you will respond to an essay prompt.
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Steps:
- Read the page that tells the backstory to the Planet Money t-shirt project.
- Watch the five part documentary
- Read the stories behind the t-shirt’s different stages of production:
Essay prompt:
A comparative advantage exists when a particular task can be done or a good can be produced at a lower opportunity cost by one nation than by a potential trading partner. When countries specialize in the goods for which they have a comparative advantage, the allocation of resources (land, labor and capital) between nations is more efficient, allowing for a greater level of overall production and income than what is possible without trade.Carefully explain how the the story of the production of the Planet Money t-shirt demonstrates the principle of comparative advantage.
