introduction: 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.
59 comments:
Minnu Augustine
Period 2
The principle of the comparative advantage of money is demonstrated by the first step in the production of the Planet Money t-shirts, the harvesting of cotton. Cotton is mostly grown in countries close to Columbia, Indonesia, and Bangladesh because the land and labor are cheap. With resources such as technology and report cards, farmers are able to develop more efficient methods to grow, pick, and improve their yields for the next year. Specific countries have the means of land and labor to grow cotton that will result in the most beneficial yields, so there is definitely a comparative advantage. The second step of the production includes innovative machines which sort and process the cotton. Machines can be set up almost anywhere as long as the country has cheap labor and is close to where clothes are made. Countries like Bangladesh and Columbia pay lower wages compared to what it would cost to make the T-shirts in the U.S. The transportation costs of the cotton grown in the U.S., shipped to Indonesia for sorting, the t-shirt made in Bangladesh, and finally shipped back to the U.S. is less than 1 U.S. dollar. Comparative advantage truly does allow greater overall production at a lower cost as demonstrated by the production of Planet Money t-shirts.
Ashley Verghese
Period 4
Planet Money uses just regular cotton to make the shirts itself. Behind the shirt he says is a "world". They harvest the cotton in Mississippi and then send it around the world due to the innovation of machines around the world. It is a lower opportunity cost because it is cheap labor to pay for.The usage of machines help create the fabric and help get the job done quicker. There are people around the world who are looking for work.4 million people work in the garment industry in Bangladesh at very low wages.So in underdeveloped countries it is cheaper to make the shirts, since these people get barely any pay, than it would in the US. The shirts are put into containers in Columbia then arrives to Miami. When it arrives the costs of everything to make the shirt is analyzed. Just the transportation of the shirts is only pennies per shirt. Comparative Advantage is seen through Planet Money's process. Many people around the world are involved in making a shirts. The labor and machines make the comparative advantage more efficient and affordable for businesses. People who help have a benefit because without this garment industry their work life wont exist. So therefore comparative advantage portrayed through Planet Money is very efficient and successful through its steps of harvesting cotton to pressing the cotton to transportation.
Even though the shirt's cotton is made in The United States, after it is produced and modified (GMO), it is sent to places like Bangladesh to be made into fabric. These women in Bangladesh live in extreme poverty and very poor conditions. The revolts in Bangladesh shows how unhappy the people are, when all they want is a little more food. Despite the working and social conditions of these countries, this company still outsources because Bangladesh has a comparative advantage of cheap labor. It takes seven cents to ship the shirt from Colombia to Miami, it takes 60 cents to farm the cotton, it takes 90 cents to make the shirt, and it takes 2.70 dollars for the shirt to be shipped from the warehouse to the store. The shipping container actually save a lot of money on shipping. Just a simple shirt with a chipmunk on it that is sold in America will actually be grown in America, and to save money, sent all the way to Bangladesh, and with just seven cents can be shipped all the way back. The cost of shipping from Bangladesh to America is barely a fraction of what it takes to ship something withing America, that's how insane the price differences is and the comparative advantage other countries have.
The story of the production of the Planet Money T-Shirt demonstrates the principles of comparative advantage because Planet Money takes advantage of comparative advantage to create their t-shirts. When they tallked up how much the cost of making and distributing the shirts actually was, it was kind of striking at how small it was. This is in large part because of Planet Money realizing the advantages to taking advantage of the principles of comparative advantage. They got their cotton using genetically modified cotton, which offers a host of qualitative and economic advantages. The countries the shirts are made it also provide a host of advantages due to the principles of comparative advantages, such as how little the workers are paid. This is especially the case in Bangladesh, where working in the garment industry offers few advantages for the actual workers, but these workers are so desperate they must take advantage of any chance at earning extra money that they can. For the people having their shirts made in Bangladesh however, there are host of advantages to be offered. If these countries were to be made in the U.S. instead, t-shirt companies and Planet Money would have made less profit and the 4 million garment workers in Bangladesh would not have had the work they so sorely needed. Planet Money took advantage of the principle of comparative advantage by utilizing different countries that specialize in certain industries, such as how Bangladesh and Columbia specialize in making the t-shirts or how the United States specializes in taking advantage of advances in technology to harvest 13,000 bales of cotton using only 13 people. All of this collaboration is in turn made cheap and profitable for both countries through the utilization of containers. In the end, comparative advantage allowed all parties to profit off of collaboration, and even profit even more than if they had not collaborated.
In the production of the Planet Money t-shirts, we see that the shirt has traveled around the world in the different stages of its production. Starting from the production of raw materials, the US grows the cotton needed by genetic engineering at a very low price, or cost, having only a few people actually doing the labor of cultivating and harvesting the plants. If left to other countries to produce the cotton, then the cost of production would be higher and the quantity or quality of the material produced might not be as much as the US. In terms of cotton production, the US has a comparative advantage and in turn, influences the final price less. The next step to the making the shirts go to Bangladesh and Columbia where the people and the machines made there form the materials and stitch the cloth into their final form of cotton shirts. Having immense populations willing to work at low wages (much lower than if workers in US would be paid to make the shirts) the factories can mass produce the completed shirts at a low price, also influences the final price of the shirt less. And by using the transporting boxes that ship the shirts in bulk, the transportation price is cut down. The different stages of production of the shirt optimizes each country's resources, whether it is manpower or raw materials or skilled/unskilled specialization, helps to raise the overall level of production and income.
-6th
Planet Money's T-shirts are produced in numerous different places, each responsible for the part of the process they can perform the cheapest. Thus, comparative advantage enables the shirts to be produced and sold cheaply. The shirts begin in Mississippi as cotton, where only 13 people can make 9.4 million shirts a year due to genetically-modified cotton seeds as well as advanced technology. America grows cotton the most efficiently in the entire world with very low operating costs, giving it this comparative advantage. Other parts of the world may not have the correct climate, seeds, or technology to grow the plant as efficiently as the U.S. The raw cotton is then sent to Indonesia and Bangladesh, where again machines do most of the work turning the cotton into yarn. With very few employees, these countries can keep the cost of this process very low with the help of technology. Workers in Bangladesh and Colombia then stitch and sew the yarn into shirts. These countries, especially Bangladesh, keep their operating costs low with very low wages and a huge working population. Bangladesh pays their employees the lowest wages in the world in the clothing industry, giving it their comparative advantage. The boxes used in transportation hold tons of shirts and can thus be moved cheaply with the help of machines and technology. Each place has their comparative advantage at different parts in the T-shirt making process due to their resources, technology, working population, etc. They each can perform their part of the chain at the cheapest opportunity cost, exemplifying comparative advantage in the making of just a single T-shirt. Therefore production is maximized and cost is kept at a minimum.
Mervin Cherian
Period 2
The story of Planet money T shirts shows or portrays the ideology of comparative advantage. It starts of in the United States. Here they collect the cotton for the shirts. United States has the comparative advantage in cotton and thats the main reason why the United States is the largest producer of cotton. Having a factory in Bangladesh is a great idea because, it is easier for companies to spend on resources. If this particular company was supposed to open a factory in the United States, this would increase expense and in turn would hurt the economy as the prices of shirts go up and the demand for the shirts go down. On the other side it having a factory in Bangladesh costs less which allows us to be able to buy shirts at relatively lower costs. As containers came along, it allowed people to ship larger quantities together which reduces transportation costs. This story helps us see how comparative advantage can help us. As the shirts are being made in another company and trade or bring it back to the United States, we are able to enjoy our products for less price. This could also show how outsourcing is not a bad idea as well. If each country did what they were best at and traded, every country would be able to benefit from this by being able to buy products for lower prices.
Laura Rezmer-Cooper
Period 2
The story of the Planet money t-shirts shows exactly what comparative advantage is. The whole process starts in the United States with the cotton. There is a comparative advantage to using the cotton from the United States as it is the number one producer of cotton and it can be produced cheaply due the low cost. The raw cotton is then sent to factories in countries like Bangladesh and Indonesia to be put into machines to in turn be made into yarn for the t-shirts. The yarn is then sent to countries like Columbia and Bangladesh because they have a big population and can have many jobs kept at low wages as well as their operating costs low. Bangladesh pays their workers some of the lowest wages around the world, making many of the people impoverished. the shirts are then loaded into containers (the unsung heroes of the shipping industry). The containers travel thousands of miles by ship, train, and truck, to us the consumers. Each of the places that every part of the shirt was made has its own comparative advantage to another place. All of these countries are an important part of the chain that makes these shirts happen, each with their own cheapest opportunity cost, hereby showing how the comparative advantage method is used to make something as simple as a t-shirt. This way cost does not exccede outrageous amounts, and every part has their own low opportunity cost.
Wara Maknojia
Period 4
The principle of the comparative advantage of money is shown by the first step in the production of the Planet Money t-shirts, the harvesting of cotton. Cotton is mostly grown in countries close to Columbia, Indonesia, and Bangladesh because the land and labor are cheap. United States has the comparative advantage in cotton and thats the main reason why the United States is the largest producer of cotton. There are people around the world who are looking for work.4 million people work in the garment industry in Bangladesh at very low wages. So in underdeveloped countries it is cheaper to make the shirts, since these people barely get any money, than it would in the US. Having a factory in Bangladesh is a great idea because, it is easier for companies to spend on resources. Other parts of the world may not have the correct climate, seeds, or technology to grow the plant as efficiently as the U.S. The raw cotton is then sent to Indonesia and Bangladesh, where again machines do most of the work turning the cotton into yarn. With very few employees, these countries can keep the cost of this process very low with the help of technology. Workers in Bangladesh and Colombia then stitch and sew the yarn into shirts. This story helps us realize how comparative advantage can help us. This also could show how outsourcing is not a bad ideal. If each country did what they were best at and traded, every country would be able to benefit from this by being able to buy products for lower prices.
6th period
The Planet Money tshirts started off as an idea to see how the world is involved in creating an item used by many people on a daily basis, a t shirt. The first step of the journey of the planet money t shirt starts off with the cotton required to make the t shirt. The cotton used to make the shirt is grown in the United States as it is the largest and cheapest supplier of cotton. The advanced technologies allows the US to make breakthroughs in the cotton yield. With the increased cotton yield, the price of the cotton decreases, making it a ideal supply of cotton for a t shirt company. Then the cotton is taken to factories to be woven into t shirts. For the Planet Money t shirts, the make shirts were made in Bangladesh and the female t shirts were made in Colombia, because those countries have the cheapest production costs. Bangladesh has the lowest minimum wage in the world, making it the ideal place for companies to have labor workers. When certain countries raise their minimum wage, it is common to see companies change their factory location to avoid paying higher wages, showing how companies follow the law of comparative advantage. However, the humanitarian side of business is not content because the working condition of the workers is not good. After the final product is created, the next step is to transport them to the desired location. Even now, companies seek to lower their opportunity costs by using containers to transport their product. Through the use of the containers, it makes it easier to separate the goods according to category and so on. With the boxes, the company would not need to hire more working hands to help sort out the products at the final destination. Through all this, Planet Money, like most other companies, involved the world in creating a t shirt so that their opportunity cost would be lowered. Using countries that have a comparative advantage in a certain step of the process eliminates any extra costs they would have to pay if it were all conducted at one place.
Jignesh Mehta
Period 6
The concept of comparative advantage is present in each step of the shirt making process. The shirt starts its journey in the US cotton farm where technology and innovation allows us to be the largest exporter of cotton in the world. This happens because the high volume of cotton and presence of technology allow us to be the most efficient at producing cotton compared to other nations such as Indonesia and Bangladesh where cotton farming is not as efficient. However, in these countries, cheap labor is abundant so companies ship their cotton to these countries to have them stitched and made into t-shirts for a very low cost. This is a prime example of comparative advantage because countries such as the United States have very high wages and a skilled labor force. On the other hand, Bangladesh and Columbia have lower wages and a relatively less skilled labor force that is perfect for making T-shirts. As a result, companies would choose to make these shirts in lower cost Colombia and Bangladesh because they would be able to make the most shirts for the lowest cost. As a result, we are able to see the outcome of comparative advantage and how it allows us to be able to buy T-shirts at low prices from $5 to $10 dollars each. If we were not able to outsource, we would easily be paying a much greater amount per shirt. Additionally, the division of labor from country to country allows each country to gain industry from the division of labor. Surprisingly, this is all supported by the extremely low cost of transporting products overseas.
Period 2
Comparative advantage can be seen throughout every step of making the shirt. The shirt is made in the US because the US has technology to make cotton for the cheapest price compared to other nations. On the other hand, countries like Indonesia and Bangladesh have cheap labor to make the t shirts for the lowest price.This is comparative advantage because the U.S. has high wages for its labor force compared to Bangladesh and Columbia that have less skilled labor forces. The cheap cost of transporting products overseas is also part of the comparative advantage because outsourcing factory jobs like these would not be possible without the cheap rates.
The concept of competitive advantage is effectively demonstrated by the production of the Planet Money T-shirt. For instance, the cotton is first grown and picked in the US, which has the comparative advantage compared to the rest of the countries because we have extremely cheap cotton seeds and they are also genetically modified to be better, as well as other technologies that improve the cotton-picking process itself. Furthermore, having the cotton be fabricated into yarn and then produced into t-shirts in other countries also shows comparative advantage as it is cheaper for companies to have it done overseas. This is because the people living in the poorer, third-world countries like Bangladesh are more willing to work for lower wages than they would in a first-world nation like the USA. This is what makes it so cheap for companies to export all of their raw cotton in order to have it produced into the actual shirts. All of these comparative advantages tie together when you take a look at the overall price for producing a single cotton shirt. It takes about 7 cents to ship from Columbia/Bangladesh to the US, about 60 cents to grow and pick the cotton, about 90 cents to produce the t-shirts, and just over 2 dollars to have it shipped from the warehouse to the house of a consumer. Comparative advantage is what allows all of these different costs to be minimized and therefore create the greatest benefit to the economy.
Meryl Zachariah (2nd)
The Comparative Advantage concept is evidently present through the production of Planet Money t-shirts considering that the cotton starts off in the Mississippi delta of America from cotton seeds made in Wisconsin, gets shipped to places like Columbia, Indonesia, and Bangladesh, and back here to Miami. The U.S. has such a high export of cotton since the production is so great so it's easy to grow the cotton here. Shipping the cotton out to other countries makes it easier for the actual process of fabric to materialize because the wages are so much lower. It even provides people with a source of income. Ultimately, despite shipping time, the opportunity cost of making a t-shirt in different places that specialize in different steps is much less compared to the cost of producing it all in one place. Ergo, comparative advantage defines itself.
Daniel Doucet
Period 2
Comparative advantage is necessary for us to make the most of our resources. Because our resources are scarce and price is determined by how difficult it is to make a product, having countries like Bangladesh, Vietnam, Mexico, and of course China make our products if their opportunity cost is smaller is necessary. Many people have attacked President Elect Donald Trump for having his ties made in Bangladesh considering he is an American businessman, yet in truth he is benefiting the consumer and himself by offering the same product for a lower price. Tariffs and other government limits that discourage free trade only harm the government that puts them in place. Because the Planet Money t-shirts follow this same pattern, with their production in Bangladesh and other countries being cheaper than their production locally, they demonstrate the idea of comparative advantage perfectly.
period 2
Throughout the t-shirt making process you can see the principle of cooperative advantage. The journey starts in the US, where the cotton required comes from. The cotton comes from a farm in the US. United States has a comparative advantage over other countries because of their technology. US can get high yield of cotton for relatively low price. However, cotton goes overseas because of the cheap labor source. Countries like Columbia, Indonesia, and Bangladesh are able to make the fabric cheaper then anywhere else. since most of these countries are third war, people there are willing to work for a lower wage. This allows company make things over seas for a cheaper price. Now shipping things back to the US is a lot cheaper and faster.
Sonia Gupta
2nd Period
The principle of the comparative advantage of money is shown in the story of the Planet money t-shirts. The process begins with the harvest of cotton. Even though the shirt's cotton is made in The United States, after it is produced and modified, it is sent to places like Bangladesh to be made into fabric. Cotton is mostly grown in countries close to Columbia, Indonesia, and Bangladesh because the land and labor are cheap. With resources such as technology and report cards, farmers are able to develop more efficient methods to grow, pick, and improve their yields for the next year. These countries have lower wages and a relatively less skilled labor force that is perfect for making T-shirts. It takes about 7 cents to ship from Columbia/Bangladesh to the US, about 60 cents to grow and pick the cotton, about 90 cents to produce the t-shirts, and just over 2 dollars to have it shipped from the warehouse to the house of a consumer.
Erica Wong
By outsourcing each individual step of the process, comparative advantage is the explanation for the reason many countries do that. In Bangladesh and Columbia, the workers get paid so little in comparison to the total price of the T-Shirt, but because it its cheaper for us, we outsource it to them. Cotton farms in the US are able to mass produce the cotton due to GMOs. Because the cost of shipping is the cheapest factor (due to the invention of shipping containers) out of the handling, labor, and etc, we are able to utilize other countries' resources in the way we do. Thus, comparative advantage shows we can produce the product for cheap elsewhere, help their economy, while still giving buyers the product for a reasonable price.
The Planet Money T-Shirt project made use of comparative advantage to create their T shirts. By taking advantage of comparative advantage, Planet Money is able to produce their T shirts at an impressively low cost. Genetically modified cotton is used, which offers many advantages both economically and in regard to the actual shirt quality. Through comparative advantagege, the countries that produce the T shirts also have advantages such as Bangladesh where workers can be paid low wages. However, economic conditions ar so harsh in these countries that workers are forced to take these jobs. Foreign countries that purchase shirts from countries such as Bangladesh receive many advantages such as cheaper costs because they have a higher opportunity cost than Bangladesh. Planet Money would have made less profit producing shirts in America and the millions of Bangladesh workers would have been out of work. Planet Money made a smart business decision when they utilized comarative advantage to trade with countries that specialize in T shirt production to lower costs; and the US helps by specializing in and trading technology that allows these foreign countries to produce more efficitiently. Containers allow for counties to specialize in what they are best at and trade with others in order keep cost of production low. Overall, comparative advantage allows all parties to benefit through specialization and trade at full efficiency in productivity.
James Ware
4th Period
Comparative advantage is showed in the t-shirt industry. Cotton has always been a strong resource in the southern United States. With today's technology we are able to genetically manufacture better seeds creating superior cotton. Other nations lack the climate or technology to yield such crops so its best that the US grows their own. In Columbia and Bangladesh, labor is cheaper and more people will take those jobs, but as pointed out in Columbia the economy is better and other people are not as dependent on the industry. Shipping containers make overseas trade cheap thus their is less cost if your ship your product from across the world.
Anjana Thomas
2nd period
The principle of the comparative advantage of money is expemplified in the first step in the production of the Planet Money t-shirts, the harvesting of cotton. The U.S. has such a high export of cotton since the production is so great so it's easy to grow the cotton in this location. Specific countries have the means of land and labor to grow cotton that will result in the most beneficial yields, so there is definitely a comparative advantage. The second step of the production includes innovative machines which sort and process the cotton. Countries like Columbia or Indonesia where they can make goods at a cheaper price because of the people willing to do the work for whatever price, since there is no law agaisnt that.
Milen Thomas
Period 6
Project Money shows the advantages of comparative advantage by showing several examples of how comparative advantage works. Bowen the Cotton Farmer is one example, who makes enough cotton for 9 million shirts just by himself. By having only the people who are most efficient at making a product, make it, it allows for the price of the product to be much lower. The combination of the garment workers such as Jasmine in India who need the job regardless thus giving them a low opportunity cost, efficient machines and Bowen, the price per shirt is only 7 cents to produce. This low price is due to these workers following the law of comparative advantage and doing what they have the lowest opportunity cost for. If a shirt was all made in one country the cost of production would be much higher and shirts might be a rarity.
Aneeka Khan
4th period
Both concepts of protectionism and comparative advantage are seen while producing the Planet Money t-shirts. During the four stages where the US supplies cotton, America has the most cotton in the world so it's relatively inexpensive to get cotton for the shirts from America. So, the first step was acquiring cotton, the next was using that cotton to create the shirt with labor, so people in Bangladesh and Cuba have a large factory industry and the labor is inexpensive as compared to Americans making the shirts. Using other countries skills for making the shirts was inexpensive and it both helps the American economy and the other countries. The people from both countries benefit, because the producing the shirts paid better than other jobs that were available in these countries. When shipping the shirts back to America, it was the most expensive part of the whole process, but it was still less compared to America using their own resources and labor for cretaing the shirts. So, by using other countries who have the best skills and is relatively inexpensive, the production of these shirts was possible.
Ben Alcock
4th period
The story about Planet Money T-Shirt and its production illustrates the principles of comparative advantage because Planet Money uses comparative advantage to make their t-shirts. When they came up with how much the cost of making and distributing the shirts actually was, it was astonishing how small it was. This is largely because Planet Money realized the benefit of the principles of comparative advantage. They got their cotton using genetically modified cotton, which offers a host of qualitative and economic advantages. The countries the shirts are made it also provide a host of pros due to the principles of comparative advantages, such as paying the workers as little as posssible. This is especially the case in Bangladesh, where working in the garment industry offers few advantages for the actual workers, but many of these workers are so desperate they must take advantage of any chance at earning extra money that they can. For the people having their shirts made in Bangladesh however, there are host of advantages to be offered. If these countries were to be made in the U.S. instead, t-shirt companies and Planet Money would have made much less profit and the 4 million garment workers in Bangladesh would not have had the work they so sorely needed. Planet Money took advantage of the principle of comparative advantage by utilizing different countries that specialize in certain industries, such as how Bangladesh and Columbia specialize in making the t-shirts or how the United States specializes in taking advantage of advances in technology to harvest 13,000 bales of cotton using only 13 people. All of this collaboration is in turn made cheap and profitable for both countries through the utilization of containers. In the end, comparative advantage allowed all parties to profit off of collaboration, and even profit even more than if they had not collaborated.
The story of the Planet Money's t-shirt demonstrates the principle of comparative advantage through the utilization of specialization by different nations. The raw material, cotton, is grown in the nation with the lower opportunity costs: The United States. The cotton is then shipped to Indonesia, where it can be woven into yarn for a low opportunity cost. The fabric is sent to factories in Colombia and Indonesia to be made into t-shirts at a low opportunity cost. The shirts are shipped again to the United States where they are printed and sold. Each step of the process of making the t-shirt is situated in a nation that has an abundance or low cost of the resources needed to complete the step. This is comparative advantage, where each country has specialized industries because of their unique resources.
Period 4
Planet money and its production is a great example of the principle of comparative advantage. One of the most effective use of comparative advantage is the harvesting of cotton. It is initially produced in the United States and then sent around the world to be made into fabric. Due to new innovative technology and resources cotton is very easy to grow than before. Thus, planet money sends cotton to Bangladesh to be made into fabric. This is comparative advantage because it costs them very less as compared to if the cotton was processed in the United States. Land and labor is very cheap in Bangladesh and therefore, planet money uses the principle of comparative advantage. In addition, they save so much money on shipping. A shirt made in America will be sent all the way to Bangladesh. It costs very little to send all the way to Bangladesh than to ship it within America. The cost of delivery from Bangladesh to America is a small amount compared to what it takes to ship something within America. This once again demonstrates the principle of comparative advantage.
Varsha Martin
2nd pd
The story of the production of the Planet Money T-Shirt demonstrates the principles of comparative advantage because the Planet Money T-shirts are made of fabric that Jockey’s textile experts developed which is made in Bangladesh and Colombia. Cotton is mostly grown in countries close to Columbia, China, and India due to money conserve in the world.According to the documenmtary we can see that the men T-shirts are from Bangladesh and the women's from Cloumbia.in the Bangladeshi factory where the men’s t-shirt was made, 32 workers on an assembly line would produce 80 t-shirts per hour. In Columbia, on the other hand, 8 workers could produce 140 t-shirts per hour. A simple calculation reveals that the productivity, measured in t-shirts per hour per worker, in the two countries is: Bangladesh being 2.5 t-shirts per hour per worker while Columbia makes 17.5 t-shirts per hour per worker. According to this post, due to Columbia’s free trade agreement with the United States, textiles, and most other goods, can be imported into the US “duty-free”, meaning there are no tariffs (import taxes) imposed on Columbian produced goods. This compares to textiles from Bangladesh, on which a 16% tariff is imposed, adding significantly to the cost of producing goods there.But by looking at advantages and disadvantages you can see that Bangladesh has low wages and low productivity with 16 percent traiff. On the other hand Columbia is seen as having high productivity and high wages.When making the t-shirt the ones that are in working with the machines and getting low wages in countries.But even though Bangladesh gives low wages it is seen as the best in making t-shirt and giving good imports and exports than any other countries.
The whole story behind the making of a t-shirt shows the comparative advantage of producing a t-shirt. you see the shirts all start in us by the breeding of seed became the united States has the most advanced technology in the world, and the price to use those machines is the lowest in the world. Secondly growing cotton has been a staple in our history dating back to the days of slavery. Also seeing that our climate and vast space play key roles in growing such cotton an easy task show why we are the ideal cotton growers. Third, the stitching and the actual making of the shirts in Columbia and Bangladesh is ideal because a huge part of their social classes are garment factories. A significant number of the population work in garments factories and a significant amount of people are still in need of a job in the country, so having the shirts made there allows us to make clothes at a very low cost since we can essentially give the lowest wage possible since people will work for any amount of money. Lastly shipping goods to America is a huge part of flying products over the result in high fees makes it a smart choice to ship.
The story of Planet Money T- shirt demonstrates the idea of comparative advantage because the ideology is the medium through which the desire for making the t-shirts and being successful as a company is created. Each of the individual countries involved in the production of the shirt do so through specializatio. There is a lower opportunity cost in America for producing and collecting cotton, so they take over that aspect. They then ship them to places like Bangladesh as they have a lower opportunity cost for the labor in the factories. Then shipped to Indonesia to be woven into shirts a low opportunity cost. Then shipped back to the US to be printed and sold. Because each step invloves a country that has a lower opportunity cost in completing its part of the process, it is beneficial for bnoth parties. The specialization incorporated in the process makes for comparative advantage.
Comparative advantage is clearly demonstrated in Planet Money t-shirts. Because of the climate and other factors U.S can produce more cotton than any other country and want to continue dominating cotton production. Bangladesh and Columbia have cheap labor because of their high rate of unemployment and bad economic condition. Shipping containers is always cheaper than any other transportation methods. We split the process of production of shirt, cotton are from U.S and is processed in Bangladesh and Columbia. Comparative advantage is when one country have specialized industries and it is what causes the price of a shirt cheaper or affordable.
The Planet Money T-Shirt documentary creates a cool way to portray comparative advantage through a t-shirt. It starts off by explaining that the cotton that is grown in the U.S, then it is shipped to places like Colombia or Indonesia to be spun into yarn and then sent off to be turned into fabric by all machines that the u.s doesn't have many or any of. What i found interesting was that the men's shirts are cheaper to make in Bangladesh so they are sent there, while women's shirts are made inColombia, this is a prime example of comparative advantage because making clothes is a completely different story in the u.s than in other countries where people make very low wages to create clothes. Once made, they are then sent in loading boxes through trains and boats and trucks but it costs only pennies to transport and finally the are sent to us for about 10 ties as much as it costs to even make them. Comparative advantage is so clearly portrayed through this documentary as we see a t-shirt is most efficiently made when it costs less to make it around the world, ad could never be made just in one place for the same price, which shows the idea of comparative advantage.
Sabrina Tortolero
6th period
The Planet Money T-shirt is the perfect example of comparative advantage. Rather than creating the T-shirts in one nation, the work is split between several different nations where the cost can be minimized due to the different resources available. Since the United States is the largest exporter of cotton, much of the cotton production is focused in the U.S. Other countries allow the United States to control this because we are the most efficient at it. Next, the cotton is shipped to other countries like Indonesia that already have the technology to spin the cotton and create the fabric. Afterwards, the fabric is shipped to poorer countries such as Bangladesh that can hire workers and pay them very low wages to reduce the cost of the T-shirt. Although the working conditions of these people need to be changed, it is still important to understand that they are a crucial reason why T-shirts can be made cheap. Finally, as all this is happening, innovations such as box containers allow goods to be transported across the world at very low prices. Therefore, work can be split among the nations of the world. Overall, the T-shirt project by Planet Money effectively shows the concept of comparative advantage and how it is applied throughout the world for many everyday goods.
Period 6
The principle in economics of comparative advantage is most clearly demonstrated in the way how these t-shirts are made in steps that involve places from all over the world and people of many background. Because the U.S. has the best technology and large government subsidies that protect the advancement of this sector of farming, our country has become the most efficient at providing the most abundant and quality cotton than anywhere else in the world. The fact that they don't need to pay a lot of people anymore for the work, because machines do most of it, means that cotton can be produced at the cheapest rate in the U.S. This is an advantage that the US has over other countries. Meanwhile, other countries like Bangladesh who has cheaper labor costs then does not have to pay as much as other countries for the work that is being done to sew the t-shirts. This means more money being earned and lower costs for customers to buy it for. The whole world comes together to make a product by contributing a step that they are good at, by minimizing the costs and increasing the output. This is how products are made affordable and how larger quantities can be produced to be consumed.
Nicole Aguilar
Period 4
Comparative advantage exists within the Planet Money T-shirt production simply because of how the tasks are being handled. Several different nations choose to take on different tasks that ultimately contribute to producing the resources needed to make the T-shirts. This is a great idea because it minimizes the cost a nation has to pay in order for the production to be carried out effectively. A great example is how in Indonesia, cotton from the United States is being spun into yarn to produce the T-shirts, and shipping from Bangladesh to the United States is much cheaper than when the United States ships to other countries. In Bangladesh, cotton spinning factories are a way of life for thousands of women who live there, and the video discussing machines show that if the cotton industry were to leave Bangladesh, that most people would have no jobs, and their way of life would be destroyed. This shows us the risk that the women there go through each and every day they work there. Unlike Bangladesh, Colombia has a much better economy, and therefore, better opportunities. Doris wants to start her own business, and she most likely will due to better economic circumstances. Thus, comparative advantage is a two sided coin. One side being the opportunity cost with better outcomes, and the other is the tragic reality that dominant countries take advantage of lower economies to strengthen thier own.
Kendall Truong
Period 2
The idea of comparative advantage is to increase economic welfare by specializing in a specific product. The production of Planet Money T-Shirt resulted in a success because of the stages it went through. It began with the the material itself: cotton. It is farmed in the U.S because of its low opportunity cost then shipped to Indonesia to be woven into yarn. Next, it is moved to Columbia where it can be made into T-shirts. At last, it is shipped backed to the U.S to be sold to stores and merchandise. All of these productions at different countries are all at a low opportunity cost. These countries specialize in a certain skill or resources that benefit each other for trade and economy. As a result, their unique skills lead to the definition of comparative advantage.
Jasmine Patience
Period 2
Each aspect of making a Planet Money T-shit is performed all over the world in many differing methods. The chain of events that leads to producing one of these T-shirts lends a hand to a variety of reasons. The T-shirt begins its journey in the United States, where the cotton is grown. As the U.S. is the largest exporter of the crop in the world, and uses genetically modified cotton crops, the substance is produced in the states. It is later shipped out to countries such as Columbia, Indonesia, and Bangladesh. The labor and land use costs here are much lower in comparison to those in more developed countries such as the U.S. The cotton is spun and the fabric created here. With advanced techniques, high machinery content, and very low wages for their workers, these countries are able to produce cotton at exceedingly low costs. By using the cotton produced from these countries, Planet Money is able to produce their T-shirts at a comparatively advantageous price than many of their competitors. The splitting up of the different aspects of producing a single shirt is what makes it so cheap to make and what allows for the high profit and low production costs.
6th period
The production of Planet Money T-shirt was quite shocking to me. The little cost of shipping and producing of transportation, cotton, sewing, etc. was shocking compared to the prices of American travel. That is why some countries have the better competitive advantage as well as the reason many American companies are resorting to outsourcing. It starts with the cotton plants being juiced up by GMOs to produce a maximum amount of crop yield then moves to Bangladesh where these poor women in poverty are sewing these shirts together and it only cost a low price of 60 cents. After this it gets shipped in a shipping container for only 7 cents. Then transported to stores around the USA. Its crazy to think about how the cost of traveling around in the USA is almost double the price of producing the actual shirt. In the perspective of a business men i would of course outsource. Because money talks.
Comparative advantage is the driving force behind the incredible process of globalization that occurs in the world today. The planet money t-shirt, therefore, is a prime example of both comparative advantage and globalization. Each step of the process takes part in a very different part of the world than the step that came before it. This is due to the fact that each of the various places the t-shirt touches holds a comparative advantage for one part of the manufacturing process. The US has the comparative advantage when it comes to cotton production. This advantage is due to many factors; arable land, high technology, and quality of production. No other place on Earth can produce cotton the way the US can; high quality, cheap price. This same idea of a place where the quality and cost of production are in a sort of balance can be seen in all the other stages of creating a t-shirt. Indonesia, Colombia, Bangladesh; these countries all hold the comparative advantage for one or more of the stages in t-shirt production. For these reasons the story of the creation of planet money's t-shirt perfectly illustrates the idea of comparative advantage. Any product can be created at the cheapest price while having high quality if the invisible hand of the economy guides buyers, producers, manufacturers, and consumers to buy from whatever place holds the comparative advantage.
The story of the Planet Money's t-shirt demonstrate how different nations that specialize in specific things creates comparative advantage. Cotton is grown in the country that has the lowest opportunity cost for that input, in this case the United State. From there the cotton is shipped to Indonesia to be sown into fabric. After being sown into a fabric, it is sent to factories in Colombia and Indonesia to be made into t-shirts because these nations have the lowest labor costs. The shirts are shipped again to the United States where they are printed and sold. Each step of the process of making the t-shirt is situated in a nation that has an abundance or low cost of the resources needed to complete the step. This process is knows as comparative advantage, where each nation specializes in one thing in order to make a product for the cheapest price possible
Rizna Noorani
2nd period
The story of the production of the Planet Money t-shirt demonstrates the principle of comparative advantage through the different steps it takes to make a t-shirt. The first step is harvesting cotton. This indicates comparative advantage because the cotton is harvested in places where land and labor are cheap. By doing so, the cost of making a shirt can be brought down. The next step is machinery. The company that makes these shirts gets the yarn spun in Indonesia. This lowers the cost because the machinery is less expensive in Indonesia and the labor required to work the machines also costs the company less. The next step is workers. The company hires workers from or in foreign country and pays them very low wages. Because of this the company is able to have a very low labor cost which also contributes to a low overall cost to produce shirts. The next step are boxes. Due to the creation of shipping boxes, the company is able to send out larger quantities of the shirts to buyers. This is beneficial becuase the comapany has a low cost to transport the finished good from the factories to the stores. Due to all these steps, the company is able to get raw materials, make their products, pay their workers, and transport their finished product to consumers with as low cost as possible. This is different from companies that are based in the U.S. only and don't use foreign resources to aid in production. The company that has the lowest cost to produce their product will have the greatest comparative advantage because they will be able to price their products for lower prices and make more profit than other companies that don't use the same methods as them.
The creation of the Planet Money T-Shirt helps show the exemplary effects of comparative advantage and its benefits to the entire world. For example, the U.S. is a leading producer in cotton. They have genetically engineered cotton to a point where they can produce more cotton without being infested. The availability of this scarce resource allows the U.S. to use cotton for T-shirt production with significantly less effort and cost. This allows countries to provide resources for a specific item for the least amount of cost and effort as possible. Therefore, an item can be produced for much less than if it were to be created completely in only on country. In addition, comparative advantage minimizes cost by allowing specialized countries to cooperate in the production of an item. This allows for the use of globalization in producing something as simple as a T-Shirt.
Sean Liu
per. 4
The Planet Money t-shirt tells the story behind the entire production process of their t-shirt. From genetic modified cotton seeds which leads to modern specie of cotton trees, yarning method advanced along technology, the poor situations in garment factories, and even its shipping process of the product. It is obvious that the production of t-shirts we wear everyday involves this long process and is also time consuming. Though out the production, different nations use their advantage to provide their services and benefit in the business. Comparative advantage can be clearly seen in the process when specific countries and firms choose to commit certain businesses with the lower opportunity cost. For instance, garment factories preferred to open in Columbia and Bangladesh due to lower average wage in these countries. Cheap labors becomes a comparative advantage for Columbia and Bangladesh because, they attract more firms to open and which provide more job opportunities. Thus, over the past years, there is at least eight million workers at garment factories in Bangladesh, making Bangladesh one of the most favorable countries for factories that require lots of cheap and efficient labors.
This story very brilliantly illustrates the concept of comparative advantage. The cotton is grown in the U.S. because we have the technology, necessary to efficiently produce large amounts of it. In addition, we also have a great deal of cheap and fertile land, meaning we can have larger, and better farms. The shirts are also sewn in Bangladesh, because that is where more and more people are stuggling. This means that they are more willing to take a job in poor conditions with low pay. Making the overall cost of production less.
The process and the creation of the Planet Miney T-shirts all show the effects and various examples of comparative advantage. through each step of the creation process, a decision is made to hold each step in a certain area to maximize Sabrina and cost of the creation of the shirt. the cotton is grown in the United States and it is a GMO. Which itself shows cost efficiency given t can be grown at virtually any time of the year. After this the cotton is transported to Bangladesh, where women create the fabric from the cotton at a very low price. Once this is done, the cost of shipping the shirts in bulk back to the United States is only a small fraction of the cost that is used to make it, and therefore a minuscule occurrence to even note, because making the shirt in just the United States would be a lot more inefficient due to the wage difference in the production of the fabric and the actual shirt itself. This whole production is an effective cycle that creates the most money that it can.
Kristina iakounina 2period
Hannah Enyioma 6th
The example of the Planet Money t-shirt shows the effects and advantages of comparative advantage through its focus on the people and the resources that went into making that one shirt. The most striking example of comparative advantage to me was the difference in the lives of 2 different women in two different countries who made shirts. Jasmine in Bangladesh makes shirts to help her family survive, pay off debt, and ensure that there is a little extra food on the table for her family. However, a woman in Colombia can have the same job and earn enough money to support both her and her mother. Because Bangladesh has a lower opportunity cost than Columbia, workers in Bangladesh are seemingly taken advantage of and paid less. However, because the woman in Columbia is paid more, she has the ability to dream and desire a different future for herself. Also because America has the ability to create thousands of tons of cotton for a low price, it is the largest producer in cotton for the whole world.
2nd Period
The Planet Money T-Shirt's journey shows the way that comparative advantage works. The ability of an individual or group to carry out a particular economic activity more efficiently than another activity, that is the definition of Comparative Advantage. The Planet Money T-shirt demonstrated this by shifting their process through many different places according to their amount of resources and used the ones with an abundance of the desired resource or simply the place that would do it the cheapest. Examples include the T-shirts being made in factories in Indonesia due to their low cost of labor and the cotton for these shirts being taken from American farms due to the optimal growing conditions for cotton being in the U.S. Comparative advantage is making use of every nation possible according to their specializations, and the Planet Money T-Shirt did just that.
Anu Thomas
Period 2
The idea of comparative advantage is demonstrated in the Planet Money T-Shirt production because each stage of production takes place in a different area of the world according to where which area of the world would have the most comparative advantage in that stage. Cotton was farmed in the Missippi Delta because the United States has the comparative advantage in producing the largest quantity of cotten at a low price achieved by the high technology U.S. cotton farmers use. The U.s. has prefected cotton farming. The cotton was sent to Indonesia to be transformed into fabric because Indonesia was able to turn the cotton into fabric at a very low oppourtunity cost because they did not to pay much labor fees since they had cost effective and productive machines to weave the cotton into fabric. The fabric is made into t-shirts in Bangladesh and Columbia because Bangledesh has the comparative advantage in forming t-shirts. Since the population of Bangladesh is so large, the t-shirts can be made at a low price due to the low labor costs. It would be ore expensive to produce the shirts in countries such as the United States that have labor standards which would raise the price of labor and in turn the cost per shirt. All of the countries specialize in a different aspect of the production of a t-shirt, promoting trade and economy.
The Planet Money T-shirt shows the effects of comparative advantage plus benefits and how it drives globalization. Because of comparative advantage, in the process of making a t-shirt there are different steps, all of which can take place in a very different place than the step before. The United States has advantage in cotton production, due to many factors including technology and quality of land. Not only the U.S., but countries such as Indonesia and Bangladesh all have comparative advantage in different parts of t-shirt production because they contribute the least amount of cost and time of production than other locations. Thus, the Planet Money T-shirt represents comparative advantage very well with the explanation of how different resources can intersect for the overall production o one product.
Period 6th
Comparative advantage is demonstrated in the Planet Money T-Shirt production because when ordering a large amount of shirts companies outsource to other countries for cheaper shirts. The cotton was picked from the united states because of the large fields of high quality cotton. The cotton is cheaply then sent to Bangladesh which has a lower opportunity cost for making and printing shirts. The cotton is sent to different countries at different levels of production to be produced at the cheapest possible way.
Destiny Stanley 2nd period
The principle of the comparative advantage of money is shown by the first step in the production of the Planet Money t-shirts, the harvesting of cotton. Cotton is mostly grown in countries close to Columbia, Indonesia, and Bangladesh because the land and labor are cheap. United States has the comparative advantage in cotton and thats the main reason why the United States is the largest producer of cotton. There are people around the world who are looking for work.4 million people work in the garment industry in Bangladesh at very low wages. So in underdeveloped countries it is cheaper to make the shirts, since these people barely get any money, than it would in the US. Having a factory in Bangladesh is a great idea because, it is easier for companies to spend on resources. Other parts of the world may not have the correct climate, seeds, or technology to grow the plant as efficiently as the U.S. The raw cotton is then sent to Indonesia and Bangladesh, where again machines do most of the work turning the cotton into yarn. With very few employees, these countries can keep the cost of this process very low with the help of technology. Workers in Bangladesh and Colombia then stitch and sew the yarn into shirts. This story helps us realize how comparative advantage can help us. This also could show how outsourcing is not a bad ideal. If each country did what they were best at and traded, every country would be able to benefit from this by being able to buy products for lower prices.
Every point of the shirt making process displays comparative advantage. From making the cotton itself to shipping the shirt that the cotton is made of, comparative advantage and opportunity cost can be noted. When making the cotton, the country with land most conducive to growing cotton is used than most other countries by from it. Currently, the USA is the most efficient in making cotton because we have perfected producing and harvesting cotton, so, the USA has a comparative advantage. Then, when making the cotton into yarn and clothing, the country which has the cheapest labor and most amount of workers is used. For instance, Bangladesh is currently the country with the lowest labor cost and most workers, so a lot of businesses such as the planet money company, have shops set up in Bangladesh. Being able to outsource and use other countries workers benefit makes things cheaper, displaying the comparative advantage some countries have.
Farrah Au-Yeung
Period 4
Project Money shows the principles of comparative advantage throughout its various examples of various nations completing the task that they have the lowest opportunity cost for. First it starts off in America with the cotton farmer who makes enough cotton for 9 million shirts within one year. This is much more efficient than having people in a different country make
the cotton. The next example of comparative advantage is the jobs in India in the garment factory. The workers in the garment factory not only make many shirts by sewing but the factory provides jobs for many hundreds of women. Here, India has the lowest opportunity cost for sewing the clothes. The combination of low opportunity costs make it so that a shirt is only 0.07 cents to produce and shows off the advantages of comparative advantage.
Some countries have lower wages than others. That is how comparative advantage works. Bangladesh can produce tshirts for cheaper than us because they have a lower wages. Their currency isn't worth that much so they pay people less compared to us. The resources are cheaper for them as well since they grow them there and their labor is cheaper. They have a comparative advantage because of their low cost.
Marcella Winfiele
Period 6
Project Money demonstrates the principles of comparative advantage. The videos and articles we have analyzed give us various insights and examples of how this process truly works. It portrays the idea of how most nations will complete the task that they have the lowest opportunity cost for producing that certain product, thus, meaning the production of this good is worth more than potentially trading for this product with another nation. The first example that was given was how there is plenty, enough for over 9 million shirts each year, cotton produced here in America. With this being said it makes more sense for the United States to produce the cotton needed to make shirts versus having another nation take that part in the process and trade for it, for they have a lower opportunity cost. Next, it explained to us how the jobs in Bangladesh work, including the wages and resources. It is cheaper for the shirts to be made in Bangladesh, for their resources are cheaper and since their currency is not to the same extent of the US, they can pay their workers with a cheaper wage. Bangladesh is known as the country with the lowest labor cost, as well as having plentiful workers. By the st-shirt company outsourcing, it allows for the shirts to be made at a cheaper price than if it was to be made here in America, for our labor cost are much higher, thus, increase the expense of producing the shirt. In conclusion if each nation decided to produce the goods or services that they are best at and traded those goods for other countries best seller, than each nation would benefit and be able to buy products at a lower price. Thus, the beauty of comparative advantage.
Lloyd Videau
6th period
Project money T shirts shows comparative advantage as it shows how some nations make sure to benefit the most they can by making their opportunity cost best it can be. Like in America cotton is produced for the companies t shirts because it is easiest and cheapest to produce it there. Profits are maximized this way. Then getting the shirts masse in Bangladesh are best for the company to benefit because their employes get paid so low wages which allow the company to produce the most money that is possible. This is why getting the best comparative advantage is important for one industry to flourish.
per.2
the example of planet money t-shirts is a great example of how comparative advantage works. Comparative advantage is an economic law referring to the ability of any given economic actor to produce goods and services at a lower opportunity cost than other economic actors. In this example, comparative advantage starts when the cotton for the shirts is used in the United States. this is because the U.S. has Comparative advantage over other countries in producing cotton.It is then sent to Bangladesh where they have a low labor cost and a lot of workers, so this means they have a low opportunity cost in making t-shirts and other items.
Comparative advantage is portrayed in the t-shirt industry. Cotton is a material that has always been a strong resource in the southern United States.With the advances in our technology, we are able to genetically create better seeds, which creates superior cotton. Other countries lack the climate or advanced technology to yield such crops, so it is easier and more beneficial for the US to grow there own cotton. In places like Columbia and Bangladesh, labor is less expensive and more people will take those jobs, but Columbia has a better economy. Shipping containers make overseas trade cheap thus their is less cost if your ship your product from across the world.
The principle of comparative advantage is established by the harvesting of cotton which is the basis of producing the Planet Money t-shirts. Cotton is mainly found and harvested from the areas in the world that have cheap land and workers who receive small wages, such as Bangladesh. With newer technologies these farmers are able to harvest and gather cotton in an effective time manner and also with high amount of yields which results into a comparative advantage. After harvesting the cotton machines process the cotton. These machines are spread out among the region that has the cheap labor/land. In these countries such as Bangladesh and Columbia workers have a lower wage compared to workers in other countries which means less money to make these shirts. This whole process of shipping, sorting, and selling in the US finally becomes equivalent to less than 1 dollar because of comparative advantage. Comparative advantage helps the global economy and allows for increased production at low prices as reflected through the Production of the Planet Money t-sirts.
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