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.Copying a fellow student will earn you a zero
125 comments:
The Planet Money T-shirts are produced in various countries and each country is responsible for making and using a certain material that adds to the creation of each t-shirt for the cheapest prices. Comparative advantage allows each country to make each shirt for a very cheap cost. The four components in making these shirts are cotton, machines, people, and boxes. To make these shirts, people use cotton is harvested in countries where labor is cheap which allows the creation of each shirt to be made at a low price. With the use of new technology and “report cards” the cotton farmers are now capable of using more convenient ways of harvesting the cotton, which in turn helps their next year’s cotton yield. Keep in mind that not every country in the world is capable of growing cotton, due to terrain or climate issues, so people tend to buy cotton from places where cotton is opulent. The next step is to spin the yarn with the machinery and new technology. The yarn is spun in third- world countries, such as Indonesia at a low cost and efficient because the labor does not take that long. Next, the yarn is given to workers in Bangladesh or Colombia to be woven into shirts. Bangladesh has a large labor force where labor is very cheap and efficient. Lastly, the shirts are packaged in boxes to ship to different parts of the globe. The use of boxes is extremely cheap and easy because it allows businesses and workers to ship large amounts of t-shirts at a low cost. Every component of the t-shirt making process has a role in comparative advantage because of the working and growing conditions, as well as the size of the labor force in each country. At each stage, people are able to buy and sell items at the lowest prices with the most efficient labor.
- Rithvik Bommareddy, 4th Period
Shane Samuel
1st Peroiod
Comparative Advantage is the ability of an individual or group to carry out a particular economic activity (such as making a specific product) more efficiently than another activity. This concept of comparative advantage is presented through the 5 videos (cotton, machines, people, and boxes) in order to explain the manufacturing of T-shirts for “Planet Money”. The purpose of this collection of videos is to express how numerous factors, such as the use of certain materials and technology to create the fabric to where the finishing touches are made ultimately affects the society and helps us mass produce our desired goods. In the beginning of the video, it began with the production/collection of cotton in Missouri and how that massive field has the capability of producing about “9 million T-shirts” and how the goods are later transported to a technologically advanced area of Wisconsin, which makes sense because many other countries are not as signicantly advanced as we are, thus makes us more suitable for that aspect of the job when it comes to pulling the cotton fibers and extract extraneous material to produce the fabrics for our T-Shirts with the helpful use of the Trutzschler Blendomat, Schlafhorst SE-8 OE Spinning Machine, Fukuhara Circular Knitting Machine, and the Toyota Combing Machine. This is later transported to either Bangladesh or Columbia to manufacture the final product of our desires. The reason why we have sent these fabrics to Bangladesh and not America is because we (Americans) are providing a more beneficiary stance that allows women of the country to expand their horizon (although they do live in poor working conditions), this proves how the determination and driven economy of the manufacturing world relies on the people of the certain country for both social and economic reasons. This video also expresses how, according to Doris, that the manufacturing business is the world to her and with this economic opportunity, she was able to strive in Columbia.
The principles of comparative advantage are demonstrated by the steps Planet Money takes in making their shirts. First is cotton and how it is grown and how they use GMO's to refine the cotton to make it the way the companies want. The cotton is grown in the U.S. because we have an advantage in technology when it comes to transforming cotton to what we want it to be for a lower cost. When the cotton is grown it gets shipped off to Bangladesh where they have a comparative advantage for people who work in factories for lower pay. Bangladesh has the lowest wage for factory workers that form cotton into t-shirts this would be comparative advantage because they can produce more t-shirts with a lower price. The machines that they use also use comparative advantage as they cost less from different companies and how only certain factories can use certain ones. Lastly are containers where the t-shirts are put into and shipped across the globe to reach its destination. Comparative Advantage takes a huge role in this process with cotton, machines, people, and boxes because for different countries that can produce a lower cost for making something will always have an advantage over a country that has to pay more in order to make the same product for a higher price, like t-shirts the U.S. can produce the cotton at a lower price while Bangladesh can produce a labor force at a lower price these would represent comparative advantage over other countries.
Michael Chan
4th Period
Planet money t-shirt fully utilized the idea of comparative advantage in order to maximize their supply of t shirts at a lower cost. Reading the article as well as watching the video, shows how swiftly Planet money is going through with this process especially the cheap prices that is used to make and distribute the t shirts. For example, the cotton used to make the T-shirt is claimed to be made in the United States, however, it is originally made and and altered in countries such as Bangladesh, Indonesia, and Colombia through the use of technology. America does have the upper hand in producing cotton at a lower cost compared to other countries which gives them the competitive advantage. Moreover, the use of technology as well as the low pay that is being given to the workers of these third world countries cause the prices to drop rapidly in producing these t shirts. Workers in Bangladesh especially are given the lowest wages, but despite this they have a huge population working in the clothing industry, giving them the comparative advantage. The shipping process is considered to be the “most expensive” but even this is merely $2.70 for the shirts to be shipped from the warehouses to the store. The cost of shipping is considered to be a mere fraction of what it takes to ship something within America, emphasizing just how cheap these t shirts are made. Each country has their work that they contribute to make these t shirts at low price due to various technology, workers, and resources. Many countries are also provided with jobs due to this shipping of goods backs and forth which then helps to stabilize their economy; however, in the end Planet Money gains the most out of this as they were able to maximize their supply of T-shirts for very little cost which then results in a greater profit when selling these t shirts to the consumers who will buy them at a much higher price than they were produced for.
Jestin Raju
4th period
Tanmay Shah
2nd Period
Opportunity cost is the most fundamental aspect which guides the idea of comparative advantage. Nations’ desire for lower opportunity cost propels the practice of comparative advantage which results in the allocation of resources to confront scarcity. In turn, each nation can benefit highest profit and production capacity. The Planet Money T-Shirts follows Mankiw’s Principles of Economics which outlines the idea of comparative advantage.
First, trade offs between nations result in international trade since one country is well equipped with certain resources to complete a task. For example, refining and production of cotton is completed in the United States while the process to make yarn takes place in Indonesia. The US faces the trade off to produce cotton and make yarn by itself which would reduce its full capacity to make goods due to scarcity of resources. As a result, it passes the raw materials to countries with low cost manufacturing capabilities to increase its own output. By doing so, the US is assessing its opportunity cost.
Opportunity cost controls the economy by determining which nation will produce what material in the production process. Due to cheap labor and a large labor force in developing countries such as Indonesia, Bangladesh, and Colombia, these countries have a lower opportunity cost to spin and weave clothes in comparison to producing and refining the cotton like the US. Low opportunity cost and trade can make countries and their respective populations better off by producing employment and reducing prices of goods. The exchange of resources and finished products develops a global market of buyers and sellers.
The four aspects of the Planet Money T-Shirt, cotton, machines, people, and boxes, clearly demonstrate Mankiw’s economic principles to supply consumers with low price and high-quality products. The exchange and development of raw materials results in an increase in GDP globally and keeps unemployment at natural level across countries part of the production process. Comparative advantage plays a significant role in the following principles because it allows nations to specialize and trade among other nations.
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 more or better technological advances 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 and 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 transportation 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 lower prices as reflected through the Production of the Planet Money t-sirts.
Kevin Sani period 1
The principle of comparative advantage is demonstrated in the Plant Money documentary in the way that the processes to create the t-shirt took place in many different countries. All of the cotton was harvested in the U.S., which harvests cotton at a much cheaper cost than in any other country, thus is the reason why the U.S. is responsible for harvesting cotton. The cotton spinning is done in Indonesia as they have the comparative advantage in labor in factories. Finally the shirt is sewn in Bangladesh, where labor costs is low, in exchange for the environment being very prone to accidents. Comparative advantage is demonstrated in the way that every country is doing what is most efficient for them, whether its because of cheap labor costs, or for efficient machines that with low maintenance.
Kevin Yu
2nd Period
To fully understand how the story of the Planet Money T-shirt and how it demonstrates the principle of cooperative advantage, we must understand what cooperative advantage means. Cooperate 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. This use of specialization, helps nation produce goods efficiently, and maximize profits. Comparative advantage benefits are global, as seen in the production of the Planet Money T-shirts. In the story of the Planet Money T-shirts, they get the cotton from the United States. The reason they chose the United States over another cotton producing nation, like Colombia, Indonesia, or Bangladesh, is because the United States is the top producing cotton country. The Planet Money T-shirt brand then spun their yarn in a factory in Indonesia. In Indonesia they produce yarn most efficiently and precisely. The shirts are then spun in Bangladesh because in Bangladesh, they require the lowest minimum wage. Unfortunately, this comes with the cost of their environment. Then, shirts can be sent around the world for just pennies. For example, shirts cost 10 cents to be shipped from Bangladesh to the US, and only 7 cents from the Columbia to the US. At the end, Planet T-shirt gains a lot from selling their product. They were able to make the T-shirts at such a low price, and people were willing to pay way more. The concept of comparative advantage is very apparent through Planet Money T-Shirts.
Housna Kadrie
Period 2
I wanted to add more to my statement but I couldn't edit it, so I'm writing more here.
The principle of comparative advantage is demonstrated in the Plant Money documentary in the way that the processes to create the t-shirt took place in many different countries. All of the cotton was harvested in the U.S., which harvests cotton at a much cheaper cost than in any other country, thus is the reason why the U.S. is responsible for harvesting cotton. The cotton spinning is done in Indonesia as they have the comparative advantage in labor in factories. Finally the shirt is sewn in Bangladesh, where labor costs is low, in exchange for the environment being very prone to accidents. Comparative advantage is demonstrated in the way that every country is doing what is most efficient for them, whether its because of cheap labor costs, the environment, or because of efficient machines that have rather low maintenance. In the case of the United States, they have trucks that can harvest cotton at an incredibly fast rate. And with a low amount of workers needed to run these trucks, the "cost to harvest" each block of cotton is much lower than in any other country. If this was done in say Bangladesh, it would be much more expensive as they cannot afford such high-tech machines that can farm cotton, and also the fact that cotton doesn't grow very well in Bangladesh compared to the U.S. Because of these factors depicted in the videos, Plant Money clearly demonstrates comparative advantage.
Kevin Yu
Period 2
Josie Henry
4th period
The production of the Planet Money t-shirt demonstrates the principle of comparative advantage through various steps on the way to creating the t-shirt. Cotton is the first step to creating the shirt and the United States was the best option in harvesting the crop. The U.S. has such better technology that there is no other competitor that creates higher quality cotton through GMOs. The cotton in the U.S is better in fineness, color, length, and strength and that is why the U.S. harvests it. Next in the creation of the t-shirt is the machines, the cotton leaves the U.S. and goes to Indonesia where the cotton is then transformed into fabric. Barely any humans are involved in this process, so because the labor is less and the capital is good the cotton becomes fabric in this lower income nations. After the fabric the shirts are then sewn in countries such as Bangladesh. Bangladesh people have the lowest minimum wages in the garment industry, so major companies have their shirts made there to get the most product for the least price. Ultimately the environment and people in Bangladesh are left in poverty, but companies still make their clothes there. Finally, the goods are shipped back to the U.S. where the shirts are transported all over the country for pennies. Comparative advantage is demonstrated all throughout the process of making the planet money t-shirt because the company gains money from people spending so much more on the shirt then what it actually costs to make and each country specializes in something different for the lowest price till eventually the shirt lands in the hands of the buyers.
The making of the Planet Money T-Shirts demonstrates the concept of comparative advantage because of trading for materials with countries that can produce that material cheaply. The documentary shows the whole process of making a single shirt and the places in the world that contribute to make that one shirt. Businesses want to make their products in the cheapest way possible so they can make a profit, and the documentary did a good job at being informative and interesting. It takes people from all over the world to make one single product such as this T-shirt because they will work for lower wages compared to Americans who will not. Different countries all over the world specialize in certain things when making this T-shirt. Specializing in certain things such as producing t-shirts has a lower opportunity cost. Countries such as Colombia and Bangladesh have people who will work for low wages and you get a t-shirt made for an extremely cheap price. In the United States we produce the cotton because it is cheap since a majority of machines produce it and we have favorable agricultural conditions. The shirts from Colombia are then shipped in containers for maximum loads and expansion. Using cotton, people, machines, and boxes from different countries where they can produce with the most efficiency capitalizes the ultimate goal of producing items in the cheapest way possible, but still effective.
Jun Hin Loi
Period 4
Aolin Yang
Period 5
The story of the T-shirt demonstrates the principle of Comparative Advantage by looking at the production of cotton vs. manufacturing of yarn and clothes. The two groups are 1) The U.S., and 2) Colombia, Bangladesh, and Indonesia. The two products are A) Cotton, and B) T-shirts. A group has Comparative Advantage when it can produce a product at a lower opportunity cost than the other group. The United States has an enormous amount of land for growing cotton, and efficient cotton-picking machines that make cotton production very cheap and requiring very few people. However, labor costs in the Unites States are high, and manufacturing the yarn and t-shirts will cost a huge amount of money. Colombia, Bangladesh, and Indonesia do not have the land nor the capital to efficiently produce cotton. However, those countries have cheap labor costs, resulting in extremely low production costs of yarn and t-shirts. Overall, this means the U.S. has a lower opportunity cost when it produces cotton, and the other 3 countries have a lower opportunity cost when they produce yarn and t-shirts. Thus, the cost of the entire process of producing the t-shirt is at its lowest when the U.S. trades with the 3 countries by 1) producing cotton at a low cost in the U.S., 2) making the t-shirt at a low cost and high quantity in the 3 countries, and 3) selling them back in the U.S. at a low cost and high quantity to consumers. International trading by taking advantage of specialization and comparative advantage benefits suppliers and consumers alike.
David Ricardo introduced the concept of comparative advantage as he was trying to advocate for free international trade. Ricardo, in his argument, hypothesized that if countries did what they do best and trade off the excess, it would be beneficial for the country itself and the countries they trade with. A perfect example of Ricardo’s theory and comparative advantage was the making of the Planet Money T-shirt. The principle is clearly shown in producing the planet monkey t-shirt. During this process, we can clearly see international trade that takes place between countries whoa re specialized in certain areas of the economy so that both sides (both countries trading) could increase their benefits. In this case, we are able to see the Unites States trading with Bangladesh in return for garments and clothing, in this case the t-shirt. The process begins by shipping American homegrown cotton to Indonesia. In Indonesia, the fabric is stretched, spun, and then pressed into a fabric to be sent to Bangladesh. In Bangladesh, the fabric is then dyed, cut, and sewn into t-shorts that we can buy in America. One of America’s specializations is agriculture and we can focus on agriculture due to the ease and the ability of the land to yield the most benefits due to our advanced technology and trade benefits. Indonesia’s specialization comes from their type of labor and technology as well. Bangladesh’s specialization is cutting and sewing. Through it all, America profits from buying the cheaper international shirts as well as Bangladesh benefiting from wage and labor opportunities. By maximizing profits, everyone is satisfied.
Ashel Jaimon
Period 4
Ambareen Virani
Period 4
The Planet Money T-shirt demonstrates comparative advantage in many fields. One of the most prominent examples of comparative advantage of the production of the T-shirts is cotton. By genetically modifying cotton seeds to make them more resistant and using farming technology, the U.S. exports cotton heavily as it has a low opportunity cost. Indonesia exemplifies the principle of comparative advantage as it has cheap labor, an educated workforce, cheap electricity, a stable government, and advanced technology that allows them to comb, pull, twist, and spin the cotton effectively. Bangladesh, with its cheap labor, then lets the textiles be produced at a low rate compared to other nations. Last but not least, in the process are the boxes. Containers that hold material that we demand that assist us in the low rate production. In the end, specialization enables us to reap many rewards.
Ali Noorani
Period 1
Planet Money T-shirt is a quintessential example of the theory of comparative advantage. The process of making this shirt takes place all over the world. The cotton is grown in the United States of America, then moves to a spinning factory in Indonesia to become yarn. It then travels to its next step to become yarn. The shirts are completed in Bangladesh for the men and Columbia for the women's shirt. After completion, the shirts are boxed and shipped back to the United States of America through shipping containers. Through the different stages of the shirt being made, it goes through a process called comparative advantage. During this process, it is easiest for the United States of America to make the cotton which turns into yarn and finishes off as fabric. Next, it is easiest for Indonesia to continue the process and use their machines. Afterwards, It is easiest for Bangladesh and Columbia to stitch the shirts together and send it back to the United States of America where the idea of the shirt came from.
Harshada Kulkarni
Period # 1
The story of the T-shirt demonstrates the principle of Comparative Advantage. Comparative advantage is when one country has the ability to create a product at a lower price than the country that will probably buy said product.
Cotton: The United States is more specialized than the other countries in the production of cotton, so many people buy American due to the quality and efficiency.
Machines: This cotton is spun into yarn machines in a different country such as Indonesia, which can use the machines in greater efficiency due to the country specializing in that specify skill.
Labor: In populous countries such as Bangladesh there is a high demand of jobs, but there are more people to fill in those jobs, so the wages the workers earn is quite bare in comparison to the average American. So, in order to create cheap products, raw resources must be sent to cheap processing centers where they turn into workable goods.
Boxes: Once they turn into workable goods, they are shipped to another country that can offer labor or machines that cheaply transform the good into the final product. Businesses send it to the final destination in order to sell them to the public.
The article of the Planet Money T-Shirt is the perfect example of comparative advantage. The different places for the materials for the shirt to travel to is determined by how costly the labor for the certain task is. For example the cotton for the shirt is grown locally for the expense reasons. Then it is shipped to Indonesia in order to get through a spinning process in machines to great the thread or yard. Then it shipped to areas not doing so well, economy wise, with the thread or yard such as Bangledesh or Columbia in order create the shirts for cheaper labor. From their the boxes are shipped back to the United States. In order to be sold to consumers. The main goal was to order enough to meet their goal but once they were in a shortage of supplies they would have to go through the same process again. The consumers determine which type of T-shirts and material the shirts to see if it meets their demanded wants.
Jonathan Ngo,
Period 2
The story and process of how Planet T-Shirt's shirts are made demonstrates how comparative advantage works and how it benefits the producer and the consumer. By having certain nations do certain things for the process of making the T-Shirt this allows the seller to have lower opportunity cost, by having this low opportunity cost it also allows the consumer to buy the shirt for less. The process in which opportunity cost is lowered is done through specialization. The cotton for the shirts is grown in the U.S where it costs less to grow, then it is sent to Indonesia where machines are used to spin yarn and thread at a lower cost than other places. After the yarn and thread is spun, it is then sent to countries where wages are lower and countries with economies with poor economies. In these countries the shirts are made by people for cheap labor and then shipped back to the U.S to the producer so that they can sell the product(T-shirts) to the consumers. With Planet T-Shirts situation they did not meet the demand for the T-Shirts so they had to order more starting the process all over again.
Adrian R-Martinez
Period 2
The story and process of how Planet T-Shirt's shirts are made demonstrates how comparative advantage works and how it benefits the producer and the consumer. By having certain nations do certain things for the process of making the T-Shirt this allows the seller to have lower opportunity cost, by having this low opportunity cost it also allows the consumer to buy the shirt for less. The process in which opportunity cost is lowered is done through specialization. The cotton for the shirts is grown in the U.S where it costs less to grow, then it is sent to Indonesia where machines are used to spin yarn and thread at a lower cost than other places. After the yarn and thread is spun, it is then sent to countries where wages are lower and countries with economies with poor economies. In these countries the shirts are made by people for cheap labor and then shipped back to the U.S to the producer so that they can sell the product(T-shirts) to the consumers. With Planet T-Shirts situation they did not meet the demand for the T-Shirts so they had to order more starting the process all over again.
Adrian R-Martinez
Period 2
Pamela Gheriafi
Period 4
Comparative advantage is shown through the five videos; cotton, machines, people and boxes. In these videos, they explain the manufacturing of the T-shirrts for ‘Planet Money. These videos are there to explain how these factors, such as how materials and technology are used to create a fabric to help the population produce desired goods. The video began with the collection of cotton and how Missouri has a large field that is capable in producing a massive amount of T-shrits, which are later taken to Wisconsin to be manufactured further. Other product is produced in Bangladesh or Columbia to be manufactured and produced since it is cheaper than making in America.
The Planet Money T-shirt demonstrates comparative advantage because it shows how trading countries are better off letting other countries engage in certain parts of the T-Shirt making process because of the fact that producing/manufacturing in those countries has a lower opportunity cost. For example, The physical cotton made in the US is of superior quality, and uses less resources to produce because of advanced technology. The same cotton can be produced in other places, but it would be inferior quality-wise and take more resources to do so. Another example is the process of refining the cotton into yarn. This comes from the idea it is a complex task to string cotton and has a lower opportunity cost in Indonesia because of its stable government, lack of wage regulation, and educated workforce. While it may be cheaper on paper to produce in smaller and worse-off countries, the education, especially English-language communication, and a stable government lowers the amount of investment necessary to refine. When the shirts are assembled from the ink and cotton produced in other countries, it is necessary to have it in a place with low wages and low chance of accelerated economic growth. Producing in Bangladesh gives lower opportunity cost because there is no increased amount of investment necessary to pay wages or follow safety standards. Shipping is the backbone of the global economy, comparative advantage can only be created if goods can be moved from one country to another. The shipping containers lower costs of shipping because the entire system, from port to crane, to crane to ship, to ship to port, and port to crane requires a small workforce and is heavily automated. At the end of the day, since demand outpaced supply, the entire system had to happen again.
Zoheb Khawaja 5th period.
The success story of the Planet Money T-shirt is a good example that demonstrates the principles comparative advantage. The people who created Planet Money T-shirt were inquisitive enough to see how the process of creating a simple t-shirt is made. Most of the cotton used for the Planet Money T-shirt was produced in the United States. Surprisingly, the United States exports the most cotton than any other country in the world. This is because the United States has a more advanced technology for modified farming crops, report cards to help match the cotton, and they also from a bunch of government subsidy programs. The process of spinning the cotton into yarn is a very specific and thorough process with different complex machines. Planet Money T-shirt was spun at a factory in Indonesia. Indonesia is a famous spot for global t-shirt trade because wages are lower than other more developed countries. The shirts were made in Bangladesh, a not so developed country. The labor of the Planet Monet T-shirt provides many workers more benefits of better wage opportunity for their hard work, this builds the economy. The Planet Money T-shirt group has very smartly created their process of producing their shirts to make the most benefit out of the process in the end. They ended up creating low-cost shirts and sold them at higher prices and could not do it without the different resources and services from the different countries that helped them create their shirt. In the end, it benefited all of the people involved in creating the shirt.
Elwin Mathew
1st Period
Comparative advantage, by definition in its simplest terms, is an economic law referring to the ability of any given economic participant to produce goods and services at a lower opportunity cost than other economic participants. As a result of this, it became apparent that in order to create any product as cheaply and efficiently as possible, specialization was needed, so that each part of the manufacturing process could be done with little error and maximum labor productivity. The increase in technological innovation helped realize this fact and resulted in smoother and faster production schedules. Planet Money T-shirts are produced through the effort of various countries that adds a different element to the T-shirt, but in the most efficient and cost-less manner. Since the main ingredients in the production of each T-shirt are cotton, machines, people, and boxes, the work is spread around the world. Starting with grown cotton in the more agricultural parts of the world, with the U.S. being one of them, it is shipped to places like Indonesia to be spun into yarn, where it is then shipped again to Bangladesh or Colombia, where laborers will weave the yarn into T-shirts. Finally, the T-shirts are packaged into boxes to be exported to various places around the world, where it will be sold and worn. 3rd-world countries are the primary source of labor, since they are cost-efficient and works with the law of comparative advantage. Planet Money is able to produce higher valued goods from raw material and at low cost, which is how comparative advantage works. As a result, this helps the global market to grow by satisfying the needs of both the individuals who buy the T-shirts and the business that produces it.
The Planet Money T-shirts are not produced in one specific location. However, different parts of the shirt are made in different locations. Each region that is assigned to each piece has a comparative advantage for producing it than the other regions. In order to make the shirt, the company first needed cotton. This was assigned to a country that can harvest this crop for the cheapest and reduce labor costs. Regions with better technology for cotton harvesting have lower labor costs and more efficient yield. The cotton needs to be spun so the companies send it to third world countries as the labor is not intensive and third world countries would require less pay to work. The yarn is give to countries like Bangladesh where population is high so the labor force is extremely large. The clothes are then shipped in cheap boxes that allow for easy transport around the world. This scenario is an example of com partitive advantage as each region can produce their specific part of the shirt at a lower cost than the other. This allows for these regions to specialize in these areas and benefit the company and their own economy.
Period 1
Lauren Chamberlin
Period 5
Comparative advantage refers to the ability to produce goods and services at a lower opportunity cost than others. In the videos and background information about Planet Money T-shirts, it is shown how their T-shirts are taken all over the world so that the cost is less than if they're organic cotton or made purely in the United States. The T-shirts are taken to Colombia and Bangladesh because the cost of producing and shipping the products there for creation is less than the United States production. Planet Money would have to pay more money if the shirts were left in the United States to be manufactured, and in the end it gives them greater profits. In the end, the shipping and cost of creating the shirts in other countries. The shipping was only $0.07 and the production was only $0.90, which was due to the use of shipping containers that make shipping so inexpensive. It makes sense that the cotton comes form the United States since they have advanced technology and massive production rates, and it is beneficial to the U.S. (and the company) because it is their advantage to not buy from other nations. It is already inexpensively grown in the U.S. Furthermore, the low prices of $80 a month for the clothing workers in Bangladesh also factors into the inexpensive comparative advantage for creating the products there. Companies are able to pay people less because of their poor backgrounds and need for having enough food and shelter. It reminds me of outsourcing because both utilize other countries to help them provide a product since it is cheaper there for labor and work. Economically it is gold because it allows production and profit into the economy, but it is inhumane in instances where working conditions are horrible for those in the less developed countries that provide a service through comparative advantage. All in all, comparative advantage is used daily like in the instance of Planet Money T-shirts, and it is just one example of the loads of countries that utilize others to gain a profit on creating their products.
Sahil Shah
Period 2
Comparative advantage is used when making t-shirts because each part of the t-shirt process is done in a country that offers the cheapest and most efficient method of doing that task. The cotton is grown in the US because we have the technology and fertile land to grow the cotton. Then the cotton is shipped to countries where labor is cheaper. Here, these countries can run manufacturing factories to turn the cotton into sheets. This happens in these countries because in the US it is less efficient and has a higher opportunity cost. The yarn is spun in Indonesia because the wages are low and the factory is allowed to run for 361 days of the year. However, in the US, to achieve this same production, companies would have to give up farming or another activity in order to manufacture goods, which costs more and takes more time. The journey of the planet money t-shirt reveals how each country is able to specialize and produce a specific good. This is a result of lower opportunity costs in certain countries. As a result, these countries have the comparative advantage and allow products to be manufactured for the cheapest price possible.
The principle of comparative advantage can be related to the Plant T-shirt Project in which production of an item is made as cheaply as possible. The patterns of global trade are reflected in the numerous steps that are required to gather the most amount of materials without overspending. Using this to their advantage, United States corporations search for materials in usually lesser developed countries where raw materials like cotton are cheap. Planet T-shirts are able to cut costs on manufacturing charges by producing these products in other countries. Sadly, this practices comes with a cost. This economically efficient business system hurts the laborers that work in these factories and only allows the United States to benefit greatly. They are overworked and payed very little. These businesses see how cost effective and time efficient this system and is highlighted with Planet Money T-shirts. Through cotton,laborers, machinery, and boxes, the business go to Bangladesh to manufacture these products because the overall cost to produce in the United States is extremely expensive. The high cost is the reason behind why most of the products are not made in the United States but instead other developing countries where they have a huge working population that can help in these manufacturing plants. This has allowed the United States to grow their white collar class and has shifted these labor intensive jobs to other countries. Outsourcing is mainly beneficial to the United States and is hardly effective for the other countries as they are tied down by big United States corporations back by United States policies and laws.
Jenina Bianty
Period 5th
Naomi Samuel
Period 5
Comparative advantage is an economic term which basically means one nation having a lower opportunity cost when producing a good than a nation it trades with. In the story of the production of the Planet Money t-shirt this idea is effectively portrayed in the different manufacturing processes it takes to make the shirt. First, they start with the creation of the cotton. They say that the cotton is made in the U.S. and this is because of the fertile land and resources we have to harvest it. The growing is done in the U.S. but the labor is cheap elsewhere so the cotton is shipped to Indonesia. This is because the opportunity cost of spinning the yarn is less in Indonesia than it is in the U.S. because of the factories present there and the low wages needed for the workers at these factories. The spun yarn is then shipped to places like Bangladesh and Columbia where the labor force is very high and cheap and this is where the shirt is actually made. In these countries, have a labor force with many people and because of this they have a lower opportunity cost of producing the final product that the U.S. and Indonesia. They are then packaged in boxes and sent all around the world so they could be sold in stores. Through this scenario, we can see that 3rd world countries are ideal for labor because of the low wages required and the immense need for work in those regions. This example portrays comparative advantage perfectly because we can see that each country does what they are best in in order to get the job done and getting these shirts ready for sale. By doing this, each country benefits and it works smoothly when they do what they can through comparative advantage.
The Planet Money T-shirt demonstrates the principle of comparative advantage by showing how the shirt combines materials and labor from all over the world. The cotton to make the shirt is from Mississippi, rather than some foreign market. This shows that the price of cotton is cheaper and represents a lower opportunity cost than another market. The machines, located in Colombia, Indonesia, and Bangladesh, are cheaper to use in production of the product compared to other markets. This once again demonstrated the principle of opportunity cost which demonstrates comparative advantage. The people in the Planet Money T-shirt production also represent comparative advantage. It is cheaper to use labor in Bangladesh and Colombia, than it is in more developed countries such as the United States. Finally, the shipping method of crates represents the lowest opportunity cost for shipping. This is the definition of comparative advantage, when a good or task can be done at the lowest opportunity cost. All of this leads to the lowest opportunity cost for the consumer, and thus represents comparative advantage.
Jyotis Joy
Fifth Period
Jeremiah John
Period 2
After hearing about this story, I finally understood the different processes it takes in completing a job such as making a t-shirt. The job is completed in a way that will benefit all that is a part of it and make it easy and efficient in producing the shirt. It is done through comparative advantage which allows different nations to produce a good at a lower opportunity cost than other nations. In this scenario, the cotton is grown in the U.S. where the fertile land is plentiful and the resources that we use to cultivate it exist. This cotton is then shipped to Indonesia where the opportunity cost of spinning the cotton into yarn is lower than it is in the U.S. The labor is cheaper in this country and they have the necessary factories that are used to spin the cotton into yarn. After the cotton is spun, it is sent to highly populated areas such as Bangladesh and Colombia. The workforce is large here and also cheap so the company is able to produce more t-shirts at a fast and efficient rate. After the shirts are done being made, they are put in boxes and shipped off to countries and are ready to be sold. Through comparative advantage, each region the t-shirt making process went through benefited because the workers in these 3rd world country got money and the company was able to produce these shirts efficiently.
Crystal Obaretin
Period 1
The article and the documentary emphasize the hard work that goes into making a simple product such as a T-Shirt. It'd definitely be more expensive if shirts that were sold in the U.S. were entirely made in the U.S. but through comparative advantage and the specialization of goods our shirts go around the world and back at a cheap price. The documentary highlights the immense process of creating a t-shirt. We start in the U.S. on a large cotton farm where machines are used to gather the cotton and separate it from the genetically-modified seeds that it grew from. It then goes to a textile factory where the cotton is spun and elongated. That spun and elongated cotton is then used in a factory that consists mainly of women who sew the shirts for low wages. The shirts are then packed into large containers and ship back to the U.S. and sold back to American consumers. Replacing human labor with machinery drives the cost down as well as shipping it over seas for low-wage factory workers to sew. The methods of for producing clothing have been controversial with one side opposing the mistreatment of lowly-paid factory workers while the other side argued that if clothing was made in the U.S., prices would be much higher. Comparative advantage and specialization of labor seems to benefit the mostly wealthy nations while slightly improving the lives of individuals in developing countries by giving them a source of income.
Comparative advantage is the ability of one group to carry out an activity more efficiently, or at a lower opportunity cost, than another group. In the five segment documentary for Planet Money T-shirt, the idea of a comparative advantage if efficiently conveyed to show how a single t shirt can be made most efficiently and at the lowest price by using the advantages of certain countries. Although the United States gather the cotton for T-shirt production, it is sent out to be spun into yarn in a different country, is produced by workers in another country, and is finally shipped back to the Untied States to be sold. This process works for the United States because although the U.S. has an abundance of land that can be used for cotton farming, it is more economically efficient to produce shirts elsewhere. As stated in the video, Bangladesh is a large outsourcing company used for T-shirt production. The ethics of this decision have been called into question recently, however, due to the factory collapse in 2013 which killed numerous workers. Although it is economically efficient, and the T-shirt has a comparative advantage being produced in the Untied States, one must consider the ethics behind this decision due to the conditions in Bangladesh. There is a large comparative advantage to having T-shirt produced in less developed countries at only a few dollars total, but the ethics behind the comparative advantage are questionable at best.
Rendon Reinarz
Period 5
Cassie De Leon
Period 4
The creation and production of Planet Money T-shirts effectively demonstrated the method of comparative advantage, as shown with how the different parts of the shirt and methods of shipping the shirt were made in the most cost efficient way in order to do the greatest production. The entire cycle with how the cotton was grown in the United States and then sent to Bangladesh to create the shirt and later shipped back to the United States proves how comparative advantage is very beneficial towards gaining income, as these methods were each at the lowest opportunity costs. Despite all of the positives of gaining more shirts and saving money, this method of production possesses many negatives as well. Those in developing countries are still fighting to get paid at a greater amount and are protesting towards gaining more rights towards their hard labor. Even though the minimum wage has increased throughout time, many companies resort to other developing countries for a lower minimum wage. It is a cycle that is detrimental to many of these workers. But, by producing these products in these developing countries, companies are capable of saving money because of how there is a higher opportunity cost to produce in the United States. The method of comparative advantage is an advantageous one, as the most amount of products can be created at its cheapest cost. Many companies do use this method in order to get as much income as possible. Despite it being as great as it sounds, there are still some negatives that are imbedded in the process. Overall, comparative advantage is very good for companies to use, but of course there are some downfalls to it as well.
Jeff Kue
2nd Period
Comparative advantage essentially allows for a more efficient usage of resources between different producers. By taking advantage of comparative advantage, countries are able to maximize profits. Planet Money is an example of a company which effectively uses its resources to create and sell t-shirts. Purchasing cotton in the United States is more expensive than growing it at home, so it is to our advantage to grow rather than purchase from another source. Yet the cotton is not a t-shirt yet; it must be spun. It is, however, more expensive to spin it into our country, so exporting the cotton to other countries makes it cheaper overall. Because each country specializes in different things, the effectiveness of industry is split among hundreds of countries. Based off cheapness of labor and land availability, the prices are determined. That's why countries like Bangladesh are more efficient to spin the cotton: cheap labor. once the t-shirts are created, they are sold right back to the U.S. to complete this cycle. of course, this cycle has its flaws; there is never a perfect cycle of economics when cheap labor conflicts with ethics. Without any regulations standardizing any universal minimum wages, third world countries will often become a source for cheap labor. But that is what gives them their comparative advantage for labor just as we have it for growing cotton.
Comparative Advantage is defined as the principle in which producing a product will result in a lower opportunity cost than the producing another product. The Planet Money t-shirt and the journey around the world demonstrates the comparative advantage and specialization principle through the different functions of each country and their part in producing the t-shirts, creating an efficient way to use resources and get as much profit from t-shirt production process. The cotton part of the process perfectly demonstrates specialization because the genetically-modified cotton and the technology to produce the best-quality cotton for the t-shirts. It was also an advantage for us to grow our cotton here at home because it's cheaper to grow. The spinning process and the sewing process is cheaper to do in other countries such as Indonesia and Bangladesh, which is a comparative advantage for us. The cheap labor in developing countries and cotton production in our home country makes for greater profit with quality t-shirts. Although there were controversies with the work conditions and low wages in the factories in Bangladesh, Colombia, and Indonesia, this system is very efficient with the maximum profit.
Camille Trusclair 1st
Erin Randle
Period 5
In the story of production of the planet Money t-shirt it shows what is comparative advantage is and how it works. Comparative advantage is when a particular task can be done or a good can be produced at a lower opportunity cost. It first shows us a cotton field where it all begins.First the cotton is grown then picked all in the United States. Then it goes to countries like Colombia and Bangledish to be turned into yarn then fabric then sent to factories to be made into t-shirts. In Bangladesh the workers only get eighty dollars a month but their trade off is despite working long hours in not the best conditions they help pay off some debts and have a little money for themselves. This is why we send our cotton to them. They are the cheapest place possible to make are t-shirts and we are giving the citizens of Bangladesh a opportunity to survive in a economy so poor like the one they live in. Then it gets shipped back overseas with the help of boxes which we didn’t have until about the 1960s. The whole documentary shows how with the help of everyone shown in the video that we can work together in this world using comparative advantage.
Kyuri Baag
4th period
The world's economy is connected in many ways, one being the production of goods. Through the process of making Planet Money T-shirts, it is clear that the reason behind the interconnected economy is because of comparative advantage. Comparative advantage is when something can be done or produced at a lower opportunity cost by one nation than another. This was first seen in the U.S. where cotton is grown. With America's advances in technology such as the genetically modified cotton and efficient machinery that reduces the number of workers, the finest, best cotton is produced at a low price. Furthermore, the production is quick enough to meet the demand. However, spinning the cotton into fabric is more costly in the U.S., so shipping it to Indonesia where it is cheaper is advantageous and beneficial. Then, the fabric is sent to Columbia and Bangladesh where the labor is cheaper than the U.S. By hiring people in less-developed countries, the owners save money, produce more shirts, and sell them at lower prices. In the process of making these t-shirts, every nation was better at doing one step of the making process because of condition or advantage. Without utilizing comparative advantage, our world's economy would not be as successful and productive as it is today.
Michelle Phan
5th period
The story and process of making Planet Money T-shirts traveled to many places around the world with the aid of many different people and through this, they were able to show how comparative advantage works and affects us. Each step in making the shirt, they used comparative advantage by traveling to different parts of the world to get the cheapest source of labor in order to complete a certain task. The first step which was getting the cotton was is Missippi where technology has allowed for the harvesting of cotton to become efficient, allowing for the service to cost them only 0.06 cents per shirt. It is then shipped to Columbia or Bangladesh where the labor source to make the yarn into fabric. Despite the long hours in the factory, these Bangladesh workers receive one of the lowest wages in the world emphasizing the use of the comparative advantage of why companies go oversee for services because of how cheap they are... These service only cost about .60 cents to make for a shirt. The video shows the necessity of comparative advantage in order for a successful world economy because the process of making goods require a service from each other, allowing the world to become for productive and efficient.
Comparative advantage plays an important role in creating these Planet Money t-shirts because each country involved in this process has a comparative advantage in a specific product that they can use to trade with others given the resources they have. In the first part of producing the t-shirts, cotton is involved. The U.S. is the country that produces bales of cotton at the lowest opportunity cost because a lot of the work is done by high advanced technology, such as the John Deere 7760 pickers mentioned in the video to pick out the cotton from the plants. And since there is so much machinery that can handle the job, only a few amount of people are required to be present at the cotton farm. The U.S. also provide subsidies for cotton farmers just in case if prices fall or there’s bad harvest. The next part is the machines, where the cotton bales goes to countries like Colombia, Indonesia, and Bangladesh and into machines where they are pulled into long ropes to make yarn (a.k.a. thread). And finally, it becomes into dyed fabric. It’s a comparative advantage for these countries to participate in the process of making a t-shirt by taking the raw cotton and making it into fabric in the end because these countries have many factories dedicated to the clothing industries and machines which do all of the work. Next, there are people who take the fabric and sew it, working long hours at a low wage ($80 per month) such as Jasmine in Bangladesh and Doris in Colombia. But Colombia has a better economic situation than Bangladesh because Bangladesh is much poorer and the clothing industry is important for many people to earn jobs to earn money and provide food for the family. In this case, the comparative advantage for these countries is that they have people willing to work these low wage jobs of sewing t-shirts because it is easy to get those jobs and earn some money for survival. Next, these t-shirts are packed into boxes and shipped into a shipping container in Colombia. Since Colombia has resources such as the shipping containers and the boats to take these shipping containers to the U.S. (specifically Miami in this case), Colombia plays another role in making these t-shirts available globally. And it only costs $.70 per shirt to do this job. Finally, the consumers receive the t-shirts from their USPS provider that delivers their product. Since in the U.S. it is easy to order products online, pay for the cost and shipping, and have them arrive at your doorstep in a couple of days or weeks, it is a comparative advantage for consumers to buy these type of products. Overall, behind every Planet Money t-shirt is a whole new world full of diverse people who each play an important role in the creation of these t-shirts.
-Anne Dang, 4th period
Dominic Kochen 1st Period
The process that Planet Money T-shirts went through to be produced highlights the principle of comparative advantage in a number of ways. Firstly it shows the abilities of Bangladesh and Columbia to far for effectively produce the average t-shirt at a much better price, only having to pay workers eighty and around three hundred dollars a month for their services. In the US minimum wage comes out to be $7.25 before tax which working the amount of hours that the two girls in the documentary did would total far more that the amount that they received. In addition it shows Americas comparative advantage in producing the actual cotton for the shirts and the advanced technology that we have access to that makes it possible. Lastly comparative advantage is shown in the fact that the industries home is in far developed countries. For the clothing industry to be in the United States it would ultimately take away from other more advanced and highly productive industries. These countries that lack development can produce this clothing at a larger scale due to population as well as with a lower opportunity cost because they lack other industries. This makes them the most sensible choice comparatively.
Natalie Dye, 5th period
The Planet Money T-Shirts are a good example of comparative advantage because of the many places that make the separate parts of the t-shirt come together the cheapest and the fastest way possible. Comparative advantage allows countries to specialize in what they are best at in order to make a product end product in the most efficient way possible. In America, the raw cotton is collected then sent to machines to be threaded and turned into fabric. Afterwards, it was either sent to Bangladesh or Columbia to be sewn into the t-shirt design requested. The workers at these factories work in dangerous conditions with low wages, but the workers have no choice but to work there to pay for debts like dowries and food. Then the t-shirts are shipped across the world in shipping containers, the most efficient way to transport mass products across the world. Comparative advantage allows for products to be made the cheapest and fastest.
Radhika Daru
period 5
The process of making a Planet Money T-shirt is one that demonstrates the results of taking advantage of various nations' product specializations derived from their competitive advantage. The process of creating the shirts begins in the Mississippi, a part of the United States, which has a competitive advantage over most other countries in regards to the cotton export industry. The use of new technology and genetically enhanced cotton seeds allow the Mississippi farms to produce the necessary cotton more efficiently and in larger quantities, while still being able to keep production costs, and therefore all other price levels, low when compared to the products of other nations that do not share the same technological advances as the U.S. The next step of the process, sending the cotton to spinning factories in Indonesia to be turned into yarn, and then to factories in Bangladesh to be converted to fabric, and finally to either a Bangladeshi or Columbian factory to be assembled into shirts, is also a part of economically driven decisions and allocations of process steps. By using the facilities of these other nations to help produce the t-shirt rather than keeping all parts of the process within one country, costs of each step are able to be lowered, which allows the end product to have a lower consumer cost, while simultaneously benefitting the people of the countries that the various factories are in. Although the wages of workers from country to country varies, the work and wages benefits those that otherwise may not have any means of supporting themselves and their families, thus showing that taking advantage of the specialization of countries' factories and production centers is not only beneficial to the product company and its consumers, but also to the laborers that drive each step of the international process.
The way that Planet Money t-shirt company shows comparative advantage is by showing how the cotton made grown in the U.S. goes to Indonesia, Colombia, and Bangladesh because it is cheaper for the cotton become a t-shirt in these countries. These counties have a lower opportunity cost to produce a good at a lower price to that country that also allows the people there to find jobs. The labor is cheaper in these counties than in the U.S. so that is why Planet Money t-shirts to create the good. It goes from the U.S. to Indonesia, where the cotton becomes straightened, then to Colombia, where the cotton becomes yarn, and then finally goes to Bangladesh, where the cotton becomes fabric. This lengthy process not only helps the counties where the cotton changes into new goods, but also the people in these counties by creating new jobs and opportunities for people. Even though most of these people do not get paid much and work in terrible conditions, that is the best option they have. Comparative advantage has an enormous influence in creating t-shirts for the Planet Money company because each country involved has specified in a single thing, so they are the best at doing certain thing. They can use that specialization to trade with other countries for resources or other goods in need.
Abin Manuel
5th Period
The story of the production of Planet Money t-shirt demonstrates the principle of the comparative advantage as different stages of production takes place in different parts of the world. First, the cotton used in making the t-shirt is obtained from the United States. Although the cotton can be produced in the countries where the t-shirts are made, most of the cotton used came from the U.S due to advanced technology, government subsidies and armers are able to specify and order cotton to their preferences. Thus the U.S has the comparative advantage for producing cotton. The second step, spinning the yarn for the t-shirt takes place in a factory in Indonesia. Indonesia has a comparative advantage to other countries as they have an educated workforce, cheap and reliable electricity and a stable government. In terms of the labor used to manufacture these t-shirts Bangladesh has the highest comparative advantage due to their cheap labor costs. In fact, Bangladesh has the lowest monthly minimum wage rate in the world. The article states that cheap transportation is one of the main reasons why apparel companies went from making clothes in a single location to managing global supply chains. Thus, the t-shirts are shipped worldwide in shipping containers because of their efficiency. Overall, the production of the planet money t-shirts show us all the different people, processes and countries and their comparative advantages that lead to the manufacturing of the shirts.
Shweta Mathews
4th Period
Comparative advantage is the ability of a group or individual to perform a part of an economic activity more efficiently than it can with another economic activity. By watching the documentary and reading the articles made by the Planet Money T-shirt company i was able to observe the proficiency of comparative advantage as it takes places in its different stages around the world. The Planet Money T-shirt company utilizes the process of comparative advantage as it expands on the different stages a simple shirt must go through before becoming its final product. Beginning with cotton produced in the U.S at most cheapest and efficient location due to its highly advanced technology. Jobs which used to require several men decades ago, have turned into one man jobs due to advanced technology such as the John Deere pickers. Next the cotton travels to Bangladesh and Colombia where it gets processed into yarn. Cheap labor in Bangladesh allows for the most efficient way to mass produce the tshirts.
Priya Thomas
2nd period
Watching these videos made me understand all the different processes it takes to create and ship t-shirts. This job is done in a way where every one is benefited through comparative advantage. A comparative advantage exists when a good can be produced at a lower opportunity cost by one nation than others. In the process of making Planet Money t-shirts, the cotton is grown in U.S (Mississippi). These are sent to Indonesia because of a lower opportunity cost in development of the yarn than making it in the U.S. After that, they are sent to populated countries, like Colombia or Bangladesh, because of the large labor force and costing less money to make the shirts. After making the shirts, they are put in boxes and those boxes are put in containers, which are then shipped to Miami. Through this process, each region produces what they are best in. In this case, the labor force are making money by creating these shirts and the company produces them with minimum wasted expense.
Jibin Philip
2nd Period
Planet Money's Shirts are delivered in various better places, each in charge of the piece of the procedure they can play out the least expensive. Therefore, near favorable position empowers the shirts to be created and sold efficiently. The shirts start in Mississippi as cotton, where just 13 individuals can make 9.4 million shirts every year due to genetically altered cotton seeds and additionally propelled innovations. America develops cotton the most effectively in the whole world with low working costs, giving it this near favorable position. Different parts of the world might not have the right environment , seeds, or innovations to develop the plant as proficiently as the U.S. The crude cotton is then sent to Indonesia and Bangladesh, where again machines do the majority of the work transforming the cotton into yarn. With not very many representatives, these nations can keep the cost of this procedure low with the assistance of innovations. Specialists in Bangladesh and Colombia at that point join and sew the yarn into shirts. These nations, particularly Bangladesh, keep their working costs low with low wages and an enormous workforce . Bangladesh pays their workers the most minimal wages in the apparel business, giving it their near favorable position. The containers utilized as a part of transportation hold huge amounts of shirts and thus are easier to be moved economically with the assistance of machines and innovations. Each place has their similar preference at various parts in the shirt making process because of their assets, innovations, workforce, and etc. They each can play out their piece of the chain at the least expensive open door cost, epitomizing relative favorable position really taking shape of only a solitary shirt. In this way a cost effective solution can be thought of.
Raoof Ali
Period 5
The Planet Money tshirt company exemplifies the usage of comparative advantage as it expands on the process of the making of a tshirt around the world in its different stages. It begins in the U.S with the production of cotton. It is most efficient here as we are a more developed country and have more advanced technology than lesser developed countries. Ways in which this country exceeds others technologically is through the modification of cotton seeds. Today 90% of cotton seeds are genetically modified to withstand certain herbicides and pesticides. Along with genetically modified seeds, we also use highly advanced cotton pickers which relieve the labor force by 4 times as a job which would have require many more people decades ago only require one. The cotton then travels to places such as Colombia, Indonesia, and Bangladesh where cheap labor allows for mass production of cotton tshirts. Labor force in these locations exist because they open up many opportunities for the people of the area. After the tshirts have been made, they make their way back to the U.S in containers, a new innovation which allows for a quick and smooth transportation of the tshirst. Comparative advantage is shown in this process as we discover that a single tshirt is not created in a single location, but opens up jobs for many people around the world as it goes through different stages of manufacturing.
Roshan Mathew 1st period
Waseem Khalil P4
Comparative advantage is present in the Planet Money T-Shirt company because each task is being specialized to different countries in order to make the overall price of the shirt as low as possible. While it is entirely possible to make the shirt completely in the states, it is cheaper when we specialize. We are able to determine which countries to specialize to by using comparative advantage - when a particular task can be done by another (country in this case) at a lower opportunity cost. We have bangladesh making the male shirts, Columbia making the woman's, and the cotton is gown in the states. We might be able to save money on shipping had we also made the shirts in the states, but it is cheaper to pay more for shipping and to manufacture the shirt else where. The cost of shipping the shirt is only $0.07 per shirt, while printing the design is $0.90. Had the shirt been made in the US, the cost to ship would be slightly lower but the cost to print the design would be much higher. Therefore, we are specializing by sending our work to countries such as Bangladesh. The opportunity cost of making that shirt is much higher in the US than it is in third world countries.
The Planet Money Tshirt Company shows how the economic process of comparative advantage works around the world and how it allows for a cheaper and more efficient way of production. Cotton grown in the U.S is made possible with its advanced technology. 90% of america's cotton being genetically modified allows for almost a 100% success rate in the growth of cotton as it is protected from pesticides. People like Bowen flowers investing in highly advanced cotton picking machines exemplify the ease of cotton growing in the nation due to the 21st century innovations. Cotton then travels across the globe to places such as Colombia and Bangladesh where the majority of the tshirt making process takes place. This is made possible with the cheap and reliable labor force. This opens up many job opportunities for the people of the area, especially Bangladesh, as the garment industry is one of the nation's most prominent exports. The tshirts then travel back to the U.S with a new innovation of shipping containers which allows for smooth transitions from the places in which the tshirts are made. The planet Money Tshirt company takes advantage of the comparative advantage as it distributes the labor among different places of the world in order to accomplish a task in the most efficient and cheapest way possible.
Sarika Vura
1st period
The story and the process of making Planet Money T-shirts caused them to travel across the globe to where they found the many different people that aided in the making of this shirt at the same time as teaching us what comparative advantage is and how it affects us. They used comparative advantage to travel to where the source is cheapest for manufacturing each part of the shirt. The first step was the material, cotton, the company got their cotton from Mississippi where technology has lowered the cost of cotton per shirt to just6 cents. The cotton was then transported to either Columbia or Bangladesh where they turned the cotton into the fabric of the shirt. The people in these factories work some of the highest hours in the world, but make the lowest salaries and this how they have comparative advantage. The service here only 60 cents per shirt due to small wages they have to pay their workers. The video also shows us that comparative advantage is the reason the world can produce such productive and efficient goods and services
Jordan Jacobson
Period 2
The process of making the Planet Money t-shirt demonstrates the use of comparative advantage distributed throughout continents. The process that this documentary showed was how the making of the shirt effects America versus how it effects the people of other countries, in this case Colombia and Bangladesh. The US has the cotton that is supplied to be made into yarn in Indonesia. This is then shipped to rather Colombia or Bangladesh to make the t-shirts. It is cheaper to make the shirts in Bangladesh than making the t-shirts in Colombia because the workers in Bangladesh get lower wages. Making the t-shirts in Bangladesh is the cheapest way for America to sell these shirts, therefore they get the overall comparative advantage. The US also gets the comparative advantage when getting shipped the containers filled with clothing to sell. When they get the containers from Colombia, it only takes $0.07 for shipping. In this case as well as the other, America gets the comparative advantage because it's faster and even cheaper for Colombia to send the clothes they manufacture to America than it is for America to ship across the country.
Sarah Sultan
4th period
Comparative Advantage exists in the Planet Money T-Shirt project, as well as other clothing companies because to decrease the overall price of not only the good but the production costs as well, the different parts of the clothing were sent all over the world to get the lowest prices for the jobs. The cotton comes from the U.S because we export more than 90% of the world's cotton. Its cheaper in the U.S because GMOs and new technology have made it easier than ever to collect a large amount of cotton. The cotton is then sent to Indonesia because they have the technology to turn the cotton into yarn at a cheaper price than other countries. The yarn gets turned into fabric in Bangladesh and then is made into actual shirts in either Bangladesh or Columbia. For all of those processes, because those countries specialize in those aspects of creating the shirt, it's cheaper to get them made there rather than in the U.S or other countries. The project shows why many companies make their clothing the way they do and how comparative advantage works in these situations. By specializing in certain parts, the companies overall benefit in lower product prices and we, the people, benefit with lower buying prices.
Sanyoni Desai
5th period
The planet Money t-shirt campaign is a prime example of what a comparative advantage is. The general concept of a comparative advantage is basically doing it another place for a cheaper price than doing it an another place. This brings out the maximum efficiency in the production of something. It the simplistic ideology of why would it be better to produce something here when it can be so much cheaper if its made elsewhere. In order to reach the best income, it is conclusive that a better profit would be made if the cost to make it was lower. Based upon the statistics that the video showed, Bangladesh provided for one of the lowest incomes ever in the t-shirt industry.The cotton is grown in the US where GM cotton seeds and advanced technology makes it possible to export mass amounts of cotton at a cheap price. Then the cotton goes through processing and are eventually made into shirts in Indonesia, Bangladesh, or Columbia. The reason why we outsource to these countries is because labor is extremely cheap there. Workers are paid the lowest wages on earth which explains why t-shirts are relatively low in costs. Comparative advantage is put at the highest efficiency if the cost to pay the workers is less than a 100 a month. The factors of a t-shirt is made at all over parts of the world at the most minimal price. Thus, in conclusion, it allows everyone to buy t-shirts at show a reasonable price because it is made so cheaply.
Raina Abraham
Period 5
Sena Pecen
Period 5
The t-shirt company that planet Money started is a small representation of how the world's or more specifically the United States' clothes are made and sold. This company is a great example of comparative advantage taking place and becoming a huge gain for the t-shirt making company. This process starts with finding a country who is best at making the raw material (in this case cotton) in order to export it for t-shirt making. The U.S. is the highest producer of this raw material due to its development in the technology for it. Therefore, the company chose the U.S. to get the cotton from since it produces the most at the best rate. Then, for the t-shirt weaving process, foreign countries such as Colombia and Bangladesh came into play since they had a vast number of people working on that job market. Using different countries for different purposes (either purchasing the raw material from or receiving the labor work from) demonstrates comparative advantage because not only is the company receiving the most product for the best prices, but the countries it is purchasing from is also gaining the most since they are each doing what they are best at. By dividing up the work, or in other words, by specializing in a certain area, the countries all work together to have the best possible gains.
The planet money t-shirt campaign shows us how comparative advantage works and how it can be beneficial to a country. Comparative advantage is when one country can make an object for a less opportunity cost than another country. This can be due to more available resources or cheaper labour costs. The 5 part documentary talked about how it was cheaper to make a shirt in Bangladesh even though it is cheaper to harvest the cotton in the US due to more advanced technology. At first, it is natural to assume that because the cotton is harvested in the US for so cheap, it would be easier to make it in the US as well to avoid paying for exporting the resources half way around the world, however, Bangladesh has a lower opportunity cost when it comes to actually producing the shirt because the cost of labor is very low there. The workers are paid extremely low wages but this is enough for them and causes a large comparative advantage for the US if they have to pay the workers very minimal wages to produce something they would need to may at least minimum wage here in the US. This may seem like a terrible option, because the workers are paid so little, but it helps consumers in the US buy t-shirts for reasonable prices and intact helps the workers in Bangladesh, Indonesia etc because it provides them a job that they might not otherwise have since their country is over populated and have very little available jobs. Comparative advantage helps both parties and is a very important content of economics since it allows for the greatest amount of goods to be used efficiently and for maximum profit.
Epstein Jacob
Period 4
The principle of comparative advantage can be clearly seen through the story of the production of the Planet Money t-shirt. The series of documentaries begins with cotton, showing us the enormous amount of cotton that the United States is capable of producing. The cotton then leaves the U.S to be turned into fabric by countries who have the comparative advantage in this process, such as Comlumbia, Bangladesh, and Indonesia. High tech-machinery allows these countries to quickly complete this transformation through twisting, stretching, and straightened. The principle of comparative advantage is already prevalent by this step; if there was no comparative advantage, then there would be no reason for the cotton to leave the U.S. In Bangladesh and Colombia, women in factories make the t-shirts for low wages, giving these countries a comparative advantage for being able to complete the process at low costs.Shipping containers are a vital part of the global economy. The comparative advantages that certain countries hold for each part of the process of t-shirt manufacturing/distribution ultimately allows us consumers to pay reasonable prices for shirts that have traveled around the globe.
Elaine Thong
2nd period
Jamie Chaffer
1st period
The concept of comparative advantage plays a major role in the production of the planet money t-shirt. It showed the different parts of creating the shirt in different areas of the world. The areas of production in its specified region is where production would be most efficient and cost less. This is how the t-shirt is produced most efficiently overall. It started with the genetically modified seeds, to the harvesting, to machines, then to people in a factory and finally to shipping. These all took place in different areas of the world by different individuals.
Lauryn Weller
4th period
Comparative advantage is when a country or nation can produce a good at a lower opportunity cost than its competitors. Planet money t-shirt fully utilizes this concept and is a great example. After watching all the videos and reading the articles corresponding to the process in which this company goes through to fully maximize their supply, as well as their profits, in the most beneficial way for themselves, it is understood they have grasped the principle behind comparative advantage. To further explain, Planet money has four stages to their process of producing their good: cotton, machines, people, and boxes. What is interesting is the fact that they do not pick a one nation or country to produce and fulfill each step of this process. They have located to process of each step in countries and places that will produce the factors to make their product at the greatest number and the lowest opportunity cost. This ultimately allows them to maximize their overall supply and make the most profit as they are sacraficing at a minimum. By locating the whole process in on nation they would be giving up from the opportunity of obtaining a more productive industry.
Kale Wicks
4th Period
The story of comparative advantage is depicted through the Planet Money T-Shirt story in many ways. From the growth of cotton to the creation of the yarn used to make it, the idea of comparative advantage is shown to exist on a magnitude of levels. To create the best t-shirt and maximize quality, Planet Money scoured the globe for peak production. The best genetically modified cotton, the best yarn, and the best place to make male and female t-shirts respectively. Comparative advantage, the idea that when a country or nation can produce a good at a lower opportunity cost than its competitors it leads to a greater level of overall production and income than without trade, is shown through the countless reference of the origin of Planet Money's t-shirt. Instead of an "Made in America" exclusive t-shirt, they opted to use resources from all over the globe, allowing for the cheapest and most resourceful cost for the shirt.
The objective of Planet Money T-Shirts was to explore the process of the creation of a simple T-Shirt, and this project helps demonstrate the use of comparative advantage. The United States, Columbia, and Bangladesh are prime examples of a comparative advantage cycle shown in the project videos. To start off the whole production, the United States is used as the most appropriate source of cotton to start production because cotton farms, such as the Flower's farm in Mississippi, uses genetically modified cotton plants that are less susceptible to disease and more resistant to pesticides which make them the better competitor than other cotton farms around the world. Also, the harvest rate in the United States is ginormous, making U.S. cotton the best and most efficient to use. Next, Columbia and Bangladesh, especially Bangladesh, are the countries used to actually weave the shirts because they will produce the shirts at a lower cost than other countries. This benefits both the supplier and maker (U.S. and Columbia and Bangladesh) in that the supplier purchases back the finished material at a lower cost than what they would have to pay if another country made the shirts, and the makers produce better quality final products with the most efficient cotton, which in turn boosts the maker's economy because of increased exports of high quality T-shirts. This whole process supports comparative advantage because the U.S. buy shirts for lower prices, which is favored, and Bangladesh and Columbia both have increased stimulated economies because of their business with the U.S. who supplies them with the most efficient cotton.
-Matthew Yee period 1
The production story of the Planet Money t-shirt demonstrates the principles of comparative advantage. First, the the story of the shirt begins in the United States where the cotton that will be used to make the shirt is grown. The cotton is grown here because the United States is the cotton king of the world. By genetically modifying seeds and using machines to pick the cotton, the U.S. has become extremely efficient at growing cotton. In just the one farm that is shown in the story, about 13,00 bales of cotton are produced in a year. After the cotton is picked and processed into bales, it is shipped around the world, to places such as Indonesia, Bangladesh, and Columbia, where it is made into yarn, then fabric, and finally shirts. There are factories that specialize in making this yarn and are very efficient at it. These factories run 24 hours per day and operate 361 days per year. Once the yarn is made, it is sent to Bangladesh as well as Columbia. these countries have become specialized in the textile industry and it makes up a large part of there economy. There it is made into fabric and then it is sown into shirts by workers. Then these shirts are shipped back to the U.S. The long process that the t-shirt goes through exemplifies how countries have take part in specialization because they benefit from it. Therefore, it is worth it for cotton to travel around the world in order to be made into a t-shirt.
Natalie Romero 2nd period
Comparative advantage is prominently shown by the video of planet money's t-shirts. There is a comparative advantage to having the different industries of different ountries produce parts of the shirts at different phases. The beginning phase with harvesting cotton is cheapest and at the least opportunity cost for midwestern farmer in the United States. Bangladesh shows a specialization in its contribution of t-shirt and and fabric production. The specialization allows for a focus on a single task of business to help drive their economy. This is more apparent when looked at in comparison to the t-shirt industry that is shown in Columbia. In Columbia, it is made very clear that t-shirts is just a single industry in the nation, and that contrasts heavily with the way the economy is driven by the t-shirt industry in Bangladesh. The trade and production of different stages of the cotton between multiple countries is an excellent example of how comparative advantage between multiple countries in production of the same industries at different stages is an excellent way to boost the economy of all of the countries that are included in the production process.
Mitchell Arwine, period 4
Alvin Yolanda Ewaldo
Period 1
The narrative of the production process in which our t-shirts made, starting from the genetic modification of our cotton seeds to the end result of a branded t-shirt, vividly demonstrates comparative advantage as participating nations of the industry like the US, Columbia, Indonesia, and Bangladesh specialize in their designated tasks to provide the t-shirt consumers. It starts in the US where they create their lab cotton seeds to plant them on the fields to grow cotton in the US farms. Because of their large lands and advanced technology, they partake in this part of the production process by growing and harvesting their cotton here and start shipping the cotton to Indonesia, where the material will be processed to make the fabrics we use for our t-shirts. Afterwards, the fabric is then shipped to Bangladesh and Columbia for these fabrics to be handmade with the use of some technology to make t-shirts. These countries specialize in this due to its immense population in manual labor, especially with the woman population who're unemployed due to segregation. After the shirts are made, they are shipped back into the US for the consumer market to purchase them. All these countries' specialization causes the production process to lower its opportunity costs due to cheaper labor and technological advancements that aid in the avoiding negative economic trade-offs on the bigger corporations.
The use of planet money t-shirts is an efficient example of how comparative advantage is used. Comparative advantage is an economic law that corresponds to the ability of any given economic attribute to make goods and services at a lower opportunity cost than other economic attributes. In this specific example, comparative advantage begins when the cotton for the shirts is placed in the United States. This is because the U.S. has Comparative advantage over different countries by manufacturing cotton. The Us then ships it to Bangladesh where they have a low labor cost and a large amount of workers, so this means they have a low opportunity cost in making t-shirts and other items.
The Planet Money T-Shirt shows the general concept of what comparative advantage is. The idea occurs when one country can produce a good or service at a lower opportunity cost than another. This brings out the maximum efficiency in the production of something. It the simplistic ideology of why would it be better to produce something here when it can be so much cheaper if its made there. In order to reach the best income, it is conclusive that a better profit would be made if the cost to make it was lower. The US has a comparative advantage in Cotton growing and countries like Bangladesh and Colombia have a comparative advantage in labor for manufacturing the shirt. Based upon the statistics that the video showed, Bangladesh provided for one of the lowest incomes ever in the t-shirt industry. Comparative advantage is put at the highest efficiency if the cost to pay the workers is less than a 100 a month. The factors of a t-shirt is made at all over parts of the world at the most minimal price. Thus, in conclusion, it allows everyone to buy t-shirts at show a reasonable price because it is made so cheaply. The only negative outcome I would see that is we, who are buying the t-shirts, are getting the best benefit out of this. The people making these are barely getting paid anything at all to make these shirts. Overall, comparative advantage gives countries roles they will excel at and making sure potential is not wasted.
Aleena Mathew, 1st period
Anna Mayzenberg 5th Period
All of the different countries that are involved in the process of what simply seems like making a T-shirt show how comparative advantage affects the economy daily. For example, the first step in making a t-shirt is to grow and pick the cotton; America is better at this because cotton is one of its major industries and we have the best technology to grow and pick it. Therefore, the U.S. can be the location for the first step of the t-shirt making process. However, after this, each new step must travel to another country that can complete it more efficiently than perhaps America could. Indonesia has the best technology (with almost use of no people) for spinning the cotton into fabric and thread, so, as they are the most efficient at this job, they are wanted by most t-shirt makers. Afterwards, the shirts get shipped into Columbia, with higher wages than its counterpart in t-shirt sewing, Bangladesh. Both of these countries have very low wages and are quite efficient in their garment industries, so they have the comparative advantage over other countries in this, although Bangladesh has recently given its garment workers raises. Finally, the process of shipping in a box is done the way that it is becuase this way costs less and is therefore, yet again, more efficient than other manners. All business decisions here are based off of who has the comparative advantage- in other words, who can do it cheaper, better, and faster.
Planet Money's t-shirt production clearly demonstrates comparative advantage. Through the help of large clothing company Jockey, Planet Money had access to facilities that allow for the greatest profits for the company. For the first part of the shirt creation, cotton was received from the U.S because it produces the most cotton and therefore leads to the U.S. having the best prices. The next part of shirt production is the straining of the cotton to yarn, where the cotton runs through a bunch of specialized machines that are able to do the process way faster than any humans could. The price of the machines is initially more than labor, but over time the cost of the machines will be worth it. The stitching of the clothes and such requires manual labor and can't be done by machines, so the job is exported to one of the cheapest places to produce, Bangladesh. It costs very little for clothing companies in Bangladesh to hire workers, therefore leading to cheaper costs for Planet Money. Shipping from and to all steps of the process is very cheap nowadays due to shipment containers. Flying the shirts would be faster to ship, but it would cost a huge number more than the shipping on a boat, so shipping by boat is used for the shirt.
Ashish Singh
Period 1
The idea of comparative advantage is portrayed through the production of the "Planet Money T-shirts." The creation of the shirts is much cheaper due to the step-by-step process the shirts go through. First, the shirts' raw cotton comes from one of the highly productive cotton farms in the world which are found in America. One farm can produce up to 9 million shirts with one sweep from its tractors making the cotton highly productive and comparatively inexpensive to anywhere else. The cotton is then shipped to a factory in another state to turn the cotton into yarn which is then woven into cloth in the same factory, using little to no human labor. After this, it is sent to either Bangladesh or Colombia to make the male and female shirt types, respectively. Although Colombia has a more stable economy, the labor in both areas is much cheaper than any other place, making the areas a booming place for the creation of the shirts. When all is finished, the shirts are sent back to America where the shirts designs are printed on. After all this, the shirts are shipped to their stores to be sold. Following the "Planet Money T-shirts" really showed how the creation of clothing affects the lives of many people around the world. The comparative advantage of making the shirts allows for businesses to sell shirts for relatively cheap prices. As a whole, there is no cheaper way of creating a shirt. This portrays the principles of comparative advantage as we can conclude that companies are able to allocate the creation of products to other countries for cheaper production costs to increase production and profit as a whole.
Matthew Reyes
Period 1
Alan John
Period 5
Comparative advantage is the driving force behind the global economy that exists today. This phenomenon yields efficient production, distribution, and trading amongst the parties involved in the creation of a good or service. The Planet Money T-shirt brilliantly exemplifies how comparative advantage naturally facilitates the global economy and profits all of the parties involved in the process. Planet Money's decision of using cotton from America sprouted from the fact that the cotton industry is thriving in America and it has the perfect climate and environment to cultivate the crop efficiently, giving America a comparative advantage in producing cotton when compared to other countries. Although America has the comparative advantage in producing cotton, they do not have the comparative advantage in spinning it; that's where Indonesia comes in. The cotton is shipped from America to Indonesia where Planet Money can have their cotton spun at a more widespread and cost-efficient basis (due to the low-wages and large manufacturing workforce in Indonesia relative to most other countries. The spun-cotton is then shipped to other developing countries for virtually the same circumstance: low wages and a plethora of factories. These countries, such as Bangladesh and Colombia, are where the shirts are put together and prepared to shipped off for consumption. In each step of Planet Money's T-shirt production, comparative advantage is utilized to maximize the efficiency of the company's processes. Had Planet Money not taken the steps they took in their manufacturing, their margins would have been inadequate for the company to sustain itself. This shows how crucial employing comparative advantage is in today's global economy.
Aylin Sanchez
2nd Period
The Planet Money t-shirt demonstrates the principles of competitive advantage. Competitive advantage is the situation where an individual, business, or country can produce at a lower opportunity cost than a competitor can. The U.S exports more cotton than any other country. The reason for this is because they use technology, report cards, and subsidies. Many farmers use cotton seeds that are developed in labs for their farms. Cotton usually gets sent off to places such as Indonesia, Columbia, and Bangladesh. In these countries they use machines to make the cotton into yarn. Also, they make the t-shits for the people in the U.S. In Bangladesh is where the men t-shits are made and in Columbia is where the women t-shirts are made. Bangladesh stands out more because, apparel exports make up a bigger share of its exports than they ever did for any of the other countries. When is time to ship the t-shirts, they are put in shipping containers, in which are later loaded onto a ship that is headed to the U.S in which later on gets loaded onto a train. In the end the U.S. ships cotton to places where they specialize in making a certain type of t-shirt for a lower cost.
The goal of comparative advantage is to allow countries to be more efficient by producing goods that they are the best at producing, this in turn lowers their opportunity cost. Companies such as Planet Money T-Shirt are just one of many companies that use the concept of comparative advantage because this concept helps benefit the various countries, companies, as well as the consumer. The result of comparative advantage is lower production costs and therefore an overall decrease in prices of the goods manufactured. Different countries are good at different things and should therefore specialize in those particular things to produce the best possible end result. In this case, the U.S. supplies the cotton as we have some of the best technology, regarding cotton, in the world. Through GMOs we can produce up to 90% of the world’s cotton that is safe from pesticides and herbicides. The cotton is then transported to countries such as Indonesia because they have the technology to turn the cotton into yarn at a cheaper price and better quality than other countries such as the U.S. After this, the yarn is transported to countries such as Bangladesh where it is turned into fabric, and is eventually made into shirts in Bangladesh, as well as Columbia. The reason for this is that these countries can provide cheap labor rather than countries such as the U.S. The final result is a shirt that has been produced at the cheapest price possible and made in countries that are the best at what they do. Through this process we are shown the benefits of comparative advantage. We the people also benefit from this because we ultimately pay cheaper prices for our goods, and countries get the opportunity to put their energy and effort towards other things lowering their opportunity cost.
Kriti Bansal
Period 5
Shiv Patel
Period 2
Comparative advantage refers to the idea that a person/firm can produce goods and services at a lower opportunity cost than others. This idea relates to the Plant T-shirt project where the production of the good of a shirt is made as cheaply and effectively as possible. Each part of the process of making the t-shirts takes place in a place where the respective process is the cheapest and most effective (where the opportunity cost for that process is the lowest). In the case of the t-shirts, the cotton is grown in the United States where the technology and fertile land make it cheap and fast to grow cotton. This raw material is shipped to countries, such as third world countries, where labor is significantly cheaper than in the United States, to turn this cotton into sheets. As the labor is cheaper, the opportunity cost for processing the cotton is much lower in those countries. The yarn is spun in Indonesia because, once again, the labor costs are much lower, and the labor is more efficient because factories can run for almost the entire year. The boxes the shirts are shipped in are also foreign for the same reason of lower opportunity cost. Although the efficiency is much higher in foreign countries, the concept of morality and ethics conflicts the idea of business. To perform these processes in the United States would be very inefficient and expensive, as ethics and regulations are in place and wages are much higher here. Therefore, the opportunity cost to produce the t-shirt would be extremely high, leading to a very expensive t-shirt.
Alwyn Joseph 5th Period
The concept of comparative advantage is evident in Planetary Money T-Shirt production.Comparative advantage occurs when one manufacturer can produce a good at a lower opportunity cost than the other. Typically, the first step of Planetary Money T-Shirt production is in the United States, where we have great climate and technology to farm cotton plants. The plants are genetically modified to be more pest resistant, and they are efficiently harvested by machines. Next, the cotton is sent to a country where cotton can be spun into fabric more efficiently, like Indonesia. Next, the fabric is sent to Bangladesh and Columbia, where it will be sewn into shirts for very cheap rates. Because of the low wages the manufacturers have to pay the workers in those countries, the manufacturers benefit greatly. Lastly, the finished shirts will be shipped in large groups inside of boxes, which is the most efficient way of shipping the finished products.This process of comparative advantage, to see what the cheapest and most profitable way to get an end product in the market drives the global economy.
Through the Planet Money T-Shirt presentation, we are able to understand the philosophy of comparative advantage. Comparative advantage is the ability of an individual or group to carry out a particular economic activity (such as making a specific product) more efficiently than another activity. As represented by the videos, from the process of cotton to the manufacturing of the t-shirts, each country has a comparative advantage in its own special way, with the U.S showing the more dominance in this aspect. The U.S has the comparative advantage when it comes to the production of cotton. This cotton is exported out and outsourced to countries overseas, such as Bangladesh and Colombia. This way these two countries can use their comparative advantage in manufacturing to produce the shirts at the most minimal price, which benefits the U.S as they are able to produce multitudes of shirts at low opportunity cost. Therefore, The U.S has the comparative advantage over other countries due to its massive control of the supply of cotton, thus being able to control many aspects of the t-shirt making industry, such as opportunity cost and outsourcing.
Jubin Joseph Period 5
Comparative advantage was clearly seen in the documentary.It was sad and touching how an individuals life differs from another so distinctly and profoundly.The worker in Columbia had an easier life because she was getting higher wages for doing the same job as the worker in Bangladesh.As a producer if I could pay someone 4 times as less to do the same work I would do it.Because it would maximize my outputs and profits.That doesn't mean its necessarily morally correct.It sucks that its like that but what can we do. Compartive advantage exists solely to me because of economic situations.When a lot of people want a job and the variety in market is so small it gets easier to just pay them lower prices.This video documentary made me realize all the things that really happen far away in other countries and made me take into consideration before I just throw away a shirt.Because the background behind that shirt might have come from who knows where.Thanks Mr.Pye this has to be the best blog so far.
The biggest characteristic of comparative advantage that was present in the Planet Money T-Shirt documentary was the ethics problem of cheap manual labor. This issue, with many different viewpoints and oppositions, illustrates a key aspect of comparative advantage: low labor costs compared to the competitors and, therefore, a lower amount spent on production and a higher yield of profit. By using Bangladesh, which has the lowest minimum wage, companies prominent in this part of the world can utilize this characteristic to be more successful, moneywise, than their competitors because they have a smaller opportunity cost, for the cost of production. The issue that arises from this seemingly positive thing is that the workers, who are being paid very minimal wages, have to work in immoral conditions for countless hours. Not all textile factories are as nice as the one shown for Planet Money, and this issue is a major concern for humanitarians who argue that economic prosperity is coming at the cost of people's lives as many companies will very unlikely raise their minimum wage for their workers in the coming years. It's arguments like these that make people ask if it is really worth using people in this manner.
Julianna Hastreiter
Period 5
Jono Joseph 5th Period
The principle of comparative advantage refers to the person or country who can produce a good or service for the lowest opportunity cost, and the Planet Money's T-Shirt project fully demonstrates it by showing how the process of making a shirt all stems from where it can be the cheapest. Many believe that T-Shirt production line works in that the raw material used are in the same country where they form it into yarn because it would be more efficient and faster, but in the economy the more important factor is of money and the fact is that the U.S. has perfected cotton by treating it as a high-tech product that they can easily mass produced plus the U.S. government is planning to subsidize cotton farmers which further increases the money they both make and save. Next according to the documentary, the cotton has to be shipped in order to form it into yarn and here the company chooses to send its male shirts to Bangladesh and its female shirts to Columbia with the reason once again being the comparative advantage as while both are overall cheaper than other countries there is the deeper level of productivity and cost-efficiency. With Columbia there is the advantages of having high productivity and “duty-free” imports but with the disadvantages of a growing high wages while Bangladesh seems to have the exact opposite situation. So while between the two choices of Columbia and Bangladesh it would seem that Columbia has the better absolute advantage, the clothing company can't resist the extremely lower wages. Lastly the method of shipping boxes is both reliable and cheap enough via boat,train, or truck resulting in the actual box shipping costing around $0.07, raw material at around $0.60, making the shirt and design at about $0.90, and the final shipment of the shirt to the consumer at $2.70 all which show how much the company gains from selecting the bets comparative advantage.
Charli Escobedo
Period 4
The production of the Planet Money t-shirt displays the aspects of comparative advantage around the world. Comparative advantage is the ability of a person or group of people to have a good produced or a task done at a low opportunity cost. For example, the United states has a comparative advantage in cotton. In the United States cotton is genetically modified to be harvested by machines and to be pest resistant. Creating large amounts of cotton per year. When the fabric is ready to be sent to its next step in production it is sent to countries such as Columbia and Bangladesh. It is sent to these places in order for the cotton tshirts to be mass produced for cheap labor. Countries like these pay their workers very low wages to get mass production done. The box containers are able to ship large amounts of shirts instead of being helped by machines in order to help transportation economically. Throughout reading the article and watching the documentary I have seen that around the world their are different comparative advantage aspects that lead to creating a product.
Luke Matthews - Period 2
This video of the process of creating a t-shirt shows a clear picture of comparative advantage. Comparative advantage is when a person, business, or country can produce something with a lower opportunity cost and better efficiency than another. In the part about the cotton production, it states that the US is the world’s leading producer of raw cotton. This is because we have such a large country for farmland and the technology to harvest it quickly and easily. They are then sent to Bangladesh and Columbia because a huge part of their economy is based on the clothing industry because they have abundant labor willing to work for cheaper wages. This makes then quicker in producer and produces faster than if it was producered in the Us or other countries. It’s all a continuous loop of who can do it the quickest and profit the most. Therefore, the clothing follows this path of being shipped from one place to another to be made the cheapest way.
The Planet Money T-Shirt Production story demonstrates comparative advantage by providing an example of the much lower production cost of textile work in countries outside the United States--like Bangladesh--and comparing it to other nation's production costs and amounts produced. The most distinctive demonstration of comparative advantage is evident in the textile production that United States fashion industries outsource to Bangladesh. While the United States has the resources to produce its own textiles, the amount of labor necessary to produce a large number of T-Shirts is incredibly large. Because Bangladesh has a lower minimum wage for its labor, the T-Shirt to labor cost ratio is significantly lower than that of the United States. Therefore, Bangladesh has a comparative advantage in developing textiles.
However, we can also see that the United States has comparative advantages as well. Because of the United States's technological advancements relative to Bangladesh, genetic modification processes and cotton farming are cheaper because it is less costly for a machine to do work in the United States than for many labors to harvest cotton elsewhere. The Planet Money Story demonstrates how comparative advantage dictates the most economically efficient way to produce a T-Shirt and provides a model for how almost all products are made.
Matthew Whaley
Period 4
Comparative advantage is the ability of a group or individual to perform a part of an economic activity more than it can with another economic activity. The idea of a comparative advantage iS efficiently conveyed to show how a single t-shirt can be made most efficiently and at the lowest price by using the advantages of certain countries. begins in the U.S with the production of cotton. It is most efficient here as we are a more developed country and have more advanced technology than lesser developed countries. Ways in which this country exceeds others technologically is through the modification of cotton seeds. At last, the finished shirts will be shipped in large groups inside of boxes, which is the most organized and beneficial way of shipping the finished products.This process of comparative advantage, to see what the cheapest and most profitable way to get a product in the market drives the global economy.
Steve Raju
5th period
Janice Wilson
Per.5
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 and Planet Money's T-shirt Project follows how a T-shirt is made through the principle of comparative advantage. First, cotton is harvested from farms in Mississippi, the U.S exports more cotton than any other country in the world due to the advancement in technology. Nearly all of cotton grown in these farms come from genetically modified seeds that are improved upon to be able to immune to herbicides and other pests. Next, the cotton is transported from the US to Colombia, Indonesia, and Bangladesh where it goes from plant to fabric with very little human involvement, just lots of machines, here is cotton is spun and stretched into yarn, Indonesia is considered a sweet spot in the middle of the global T-shirt trade, wages are lower here than they are in developed countries. However, Indonesia also has an educated workforce; cheap, reliable electricity; and a relatively stable government. The cloth is then shipped to Bangladesh, where men's shirts are made, and Colombia, where women's shirts are made. Bangladesh makes their shirts for less money and workers have low wages, however, nearly the entire country is dependent on the garment industry whereas in Colombia, the garment industry is just an industry and workers make 3x as much as those in Bangladesh.Finally, a shipping container transports the T-shirts from Bangladesh and Colombia back to the US. The actual box shipping costs around $0.07, raw material around $0.60, making the shirt and design about $0.90, and the final shipment of the shirt to the consumer at $2.70 which are all done at a comparative advantage for the buisness.
The idea of comparative advantage is the fact that a country produces something cheaper than compared to other countries. The Planet Money T-Shirt documentary goes through the very complex process that goes into making a T-Shirt but also explains the economics of that process. you would think that The US leads the the world in everything but that just isn't the case. For Example in the documentary, the country of Bangladesh holds the comparative advantage in making clothing than the US. The reason being is that because since labor is so cheap and so available they are are able to produce the shirt for less than if they were to make it in the US. Shipping is considered the most expensive on the journey from factory to store. Also with shipping being cheaper than in the US is is cheaper for companies to have there product or clothing made in these Third world countries. but also come s the issue of the horrendous conditions these workers have to brace for such little money and the idea of many jobs being outsourced for cheaper labor.
Stephen Kelly
Period 4
The Planet Money T-shirt perfectly illustrates comparative advantage. Comparative advantage is described as a party being able to do something more successfully and cheaper than another party. In the animal spirits videos, the comparative advantage is obvious. Even though we, the United States have a booming cotton industry we still go to Bangladesh and Columbia to make our clothes due to them being paid lower wages. And even though both make the shirts, Bangladesh still has the comparative advantage due to Jasmine making four times less than a Columbian worker. Although it's considered helping less developed countries by bringing them work, we still have the upper hand. After the shirts are made they're packaged and go on a boat to Miami where they stay in a Cargo box the cheapest part of the whole t-shirt making journey until they reach their merchant destination.
The story by Planet money on the production of t-shirts has demonstrated how comparative advantage affects the economy and the world. Each element in the production a very common product like a t-shirt involves the input of goods and services from countries across the world. Even though the United States has the resources to produce cotton cheaply, we do not attempt to manufacture t-shirts since the cost of production would be much higher compared to other countries like Bangladesh or Colombia. On the other hand, even though a large number of people in Bangladesh is employed by the textile industry, they do not attempt to domestically produce cotton because it can be imported at a much less cost. This indicates that the US has a comparative advantage in producing raw cotton, whereas Bangladesh or Colombia has an advantage when it comes to labor. Thus, the story of the T-shirt demonstrates that comparative advantage and specialization enables the most efficient production of goods and services.
Rakesh Johny
Period 1
The production of the Planet Money t-shirt demonstrates the principle of comparative advantage by using resources from other countries to produce their t-shirt at the lowest price possible. The United States specializes in the mass production of cotton, Indonesia’s factory illustrates precision and consistency in making the yarn, Bangladesh has cheap labor, and Columbia’s ability to greatly reduce the cost of shipping all reflect each country’s comparative advantage. This results in a greater level of overall production and income, rather than each country producing its product from scratch.
Alexis Chan
5th Period
Planet Money demonstrates the principle of comparative advantage through the production of their t-shirts. In the United States, the cotton for the shirts is grown. The United States has the advantage of both the land and the genetically modified seeds that can yield large amounts of cotton at one time. In Indonesia, the cotton goes through the process of becoming thread, or yarn, as they call it and then into fabric. These factories have technology specifically for this process. In Bangladesh and Colombia there are many people who rely on clothing factories to make a living for themselves. The whole process serves to give Planet Money the ability to maximize their supply of shirts at a low cost. Because each of these places specialize in their part of the process, they are capable of generating a greater supply of their product, rather than focusing their attention on many things at once and generating a low supply of each.
Comparative Advantage states that a country should specialize in the goods or services it can produce at the lowest opportunity costs, and then trade with another country. This idea is used in many countries to raise their purchasing power and consumer surplus. The Planet Money t-shirt company uses this theory of comparative advantage for high productivity and low wages. According to the article three reasons why U.s. dominates as the cotton king because of technology, report cards, and subsidies. The cotton then is taken to countries other countries with cheap price to change it into yarn. After the yearn is made it is then taken into Bangladesh to produce the final product. Many countries are good at different things. The main idea behind comparative advantage is that both businesses get benefited. Therefore planet money uses suppliers from Bangladesh and Columbia to help them create their t-shirts. Bangladesh and Columbia have an advantage of low wages and high productivity through comparative advantage. The U.s. pays people in Bangladesh at a cheaper cost because the value of the dollar is higher in Bangladesh. Therefore we have a great advantage.Comparative advantage helped us gain more income.
Planet Money creates simple T-Shirts, but the process of how the shirts are made is complex. The company uses comparative advantage to produce the shirts at the lowest cost possible. Comparative advantage is producing goods where it has the lowest opportunity cost to do so. The company uses cotton grown in the US because their mass scale technology made it inexpensive to produce cotton. They set up factories in countries where it would be cheapest to operate and it also gave the people there job opportunities. The wages might be low, and hours long, but for their country, they live off of it and need it. Comparative advantage allows for cheap goods to be produced and for this company, it gives other people their living.
Bryan Ta
4th Period
Planet Money T-Shirt demonstrates the principle of comparative advantage by selling products made abroad in Bangladesh and Columbia garment industries. A U.S. company, Planet Money T-Shirt has the cotton picked in the U.S. and threaded or made into fabrics. This is all the work of machines. The fabric is then shipped to factories such as Columbia or Bangladesh for individual worker to create the t-shirts. Planet Money benefits in a way that they earn so much money off their products, but the people getting paid to actually make them in Bangladesh get pad close to nothing. The company saves money by creating their products overseas. This is an example of outsourcing and resources cost less to produce the t-shirts. Finally, before t-shirts are put on the shelves of stores or back to the company to be sold online, the t-shirts are shipped back to the U.S. in shipping containers- "unsung innovations that make the global economy possible." This whole process of finding out where our t-shirts are really made, shows the outsourcing, efficiency and cost-saving methods of the garment industry.
Denise Doyle
Period 5
Sainath Krishnamurthy
Period 4
The process of creating the t-shirt begins with the cotton farms where the owners and workers work to grow and pick cotton. The man who owned the farm had formulated a genetic modifier allowing the cotton to grown faster and in greater abundance. Without the idea and formula for this genetic modifier, the cotton used to create the t-shirt might be obtained from a place where the farm was not as technologically advanced or had a suitable climate such as Bangladesh which would waste time. This would slow down production creating a greater opportunity cost. Then it goes to factories which have modern machines spinning and thinning millions of sheets of cotton every day. This is more efficient by allowing the factories that have the technology capable for the job to manufacture the cotton rather than doing it by hand elsewhere. Once the cotton transforms into yarn and is sent to factories, it seems as if the industries are organized and moving at a steady pace due to the abundance of individuals willing to work at such low wages. The woman in Bangladesh has been in the industry since she was young so must be an expert working at the factory and used to the wages although she dreams of earning more. Finally they are shipped to their respective places in the containers and on trains that run from specific places at certain times on a strict schedule. Allowing various nations and places to create a single t-shirt surprisingly saves time and allows these locations to specialize in their particular areas allowing for smoother and faster production without a large opportunity cost.
Madison Panetti
Period 5
The Planet Money T-shirt production process took place over a number of countries all benefitting from comparative advantage. When it came to the cotton used, the farm in Mississippi perfectly exemplified the advantage America has over any other country when it comes to cotton exports and production. As the documentary stated, America not only had an early start producing cotton in large amounts thanks to slavery, but in the way it's treated cotton in more recent years; as a high tech product, with 90% of America's cotton being genetically engineered for the most ideal qualities. As far as the conversion of raw cotton into yarn, the balance of Indonesia's cheap enough labor, educated workforce, cheap, reliable electricity, and a relatively stable government allows it to be a hub for yarn production. Bangladesh, having the lowest wages in the world when it comes to the garment industry, has comparative advantage over literally any other country despite the possibility of wages rising. This is due to the fact that no other country seems to be ready to hop in as the cheapest place to make clothes. The country relies so heavily on this industry that the work force is huge, further contributing to its having the upper hand. Through out the entire process comparative advantage works in any given countries favor in order to produce the cheapest highest quality products possible not only ensuring customer satisfaction, but keeping entire countries' economies running.
Jerry George
2nd Period
Comparative advantage is when a country produces a good or service for a lower opportunity cost than other countries. The Planet Money T- Shit documentary illustrates this phenomenon perfectly. The documentary describes and explains the various steps behind the process of making a shirt and selling it. More importantly, it discusses the economics behind it. In the documentary, we can understand comparative advantage better. Although US is a major producer of cotton, we still rely on countries like Bangladesh and Columbia to produce our clothing. The reason being that Bangladesh and Columbia hold the comparative advantage over the US in producing clothes. This is because labor costs are much lower in such developing countries where everyone is looking for a job, no matter what the salary. Developed countries like the US make the statement that by letting countries like Bangladesh produce our clothing, they are encouraging job growth and employment. However, salaries are very low, and the corporate companies end up being the ony ones making a large profit. Once the T-Shirts are made, a shipping container transports the t-shirts from Bangladesh and Columbia to the US. In detail, the shipping costs about 7 cents, raw material about 60 cents, and making and designing the shirt costs about 90 cents. Lastly, the shipment of the shirt to the customer is about $2.50. Such low production costs are made possible only due to the phenomena of Comparative advantage.
Many companies, such as Planet Money T-shirt, utilize comparative advantage for their resources in order to produce products for the lowest price possible. This is the reason why all the different components of creating the t-shirt (ex. collecting cotton, fabricating cotton, printing t-shirts, etc.) are all located in different parts of the world. These processes cost much less than they would in the United States, giving a comparative advantage for many of the processes in the foreign countries. For example, while the company has the opportunity to complete all of the production in the United States, ultimately cutting transportation costs, it utilizes the lower production prices in Indonesia and Cambodia since labor salaries are lower than they would be in the U.S., ultimately increasing productivity and efficiency while also providing opportunities for people in foreign countries. This is a result of one of the most important components of production costs, which is labor. Labor in foreign countries is much cheaper than in the United States since people need a job, even if it is of very low pay. Regardless of the technology that the U.S. may have, labor costs are simply lower, therefore making it a more profitable choice for many of these companies. It is evident that there are many factors to consider in making decisions about what to produce in what part of the world in order to increase company profits.
Erik Shoga
Period 2
Rayomand Hormuzdi
Period:1st
Comparative advantage summarized, basically means how certain locations around the world can produce or create a certain service or good more efficiently than any other country because of the natural resources, labor cost and area of land of the country. In the Planet Money documentary it demonstrates the creation processes of how to create the t-shirt took place in other countries. In the U.S they have the most effective way to produce cotton because the U.S has a crazy amount of farmland in Texas,California,ect. Which they use to produce the most amount of cotton at the cheapest price giving them the comparative advantage. The spinning of cotton is tasked to Indonesia as they have the comparative advantage most labor factories because of there cheap labor compared to any other country. In the end, the shirt is finished sewn in Bangladesh where labor costs for sewing are very low and in exchange for the environment being very prone to accidents. Comparative advantage is demonstrated in each step in the completion of one t-shirt because every country is tasked with what is most effective for them, the deciding factors being because of cheap labor costs, efficient factories that with low maintenance and large amounts of land.
Jackson Stanley | Period 4
Through many aspects of the Planet Money T-shirt production process, one can quite clearly observe both the principle and application of comparative advantage. As mentioned by Planet Money as they outlined their story, the cotton "phase" of the t-shirt is achieved particularly by the US, because it exports the most cotton than any other country in the world. This results from the United States specializing in the cotton crop, whether through a shift to genetic modification, technological advancements, or consistent drivers. In addition, while technology has greatly increased the efficiency of United States specialized cotton, the specialization of yarn machines themselves can be observed in places like Indonesia and Bangladesh. In doing so, all of the different machines embody the comparative advantages these countries have, as they have specifically sped up the conversion of cotton to yarn. However, as shown in Bangladesh and Columbia, machines cannot do everything, which is exactly the reason the utilization of manual labor can be seen in actually making the t-shirt. In addition, manual labor accomplishes two things: more opportunities for people that need it, and continued efficiency by specialization, yet again displaying comparative advantage. Lastly, the advantage brought on by boxes works hand-in-hand with the specialization of machines in t=shirt's other production aspects, in that it makes the final stage (transportation) much more efficient. Therefore, the increased efficiency creates more opportunities, and makes comparative advantage in each aspect that much more significant.
Planet Money T- Shirt production utilizes comparative advantage, where different countries such as Bangladesh contribute with things they can produce at a lower opportunity cost in order to make the shirt more efficiently. The first step, obtaining raw cotton, is done in the US because harvesting cotton in the United States is cheapest and yields the lowest opportunity cost (credits to our highly developed technology), which gives reason to The United States being named the "cotton king" of the world. The cotton that is harvested here then is sent off to countries such as Indonesia and Bangladesh whom turn the cotton into fabric. The cotton is shipped off after harvesting from the Us to other countries because wages in these other countries are lower than here, causing a lower opportunity cost and cheaper production elsewhere. After the production of fabric, the fabric is then sent to countries including Bangladesh and Colombia, where they are then made into female and male t shirts. Once again, there are lower production costs in these countries in which make their production more efficient than if they were to be produced anywhere else, or where the fabric itself is made. When the process is complete, and the shirts are made, they then are sent back to the united states where the finishing touches are made, and the designs for the shirts are printed on. After this, the shirts are sent off to stores where the process is complete and they are sold. This process shows how the utilization of comparative advantage makes procession much cheaper for the producer and consumer.
Taryn Gheen
Period 5
The Planet T-Shirt production model highlights comparative advantage around the world and why it is good. It starts with cotton harvesting in the United States, where cotton harvesting is cheapest for many reasons. It is then shipped around the world to countries like Columbia, Indonesia, and Bangladesh, where the labor is cheap. The people in these countries need the money to survive, and because of many factors it is better to produce the shirts there. The opportunity costs in these less developed countries makes it better for production of the shirts and cotton there. It is then shipped back to the united states for an incredibly low price, and sold to people to make a profit. Because the production costs and shipping costs from around the world are so low, it is cheaper than paying Americans to do all of it, and makes more of a profit while spreading wealth to the countries that need it. It highlights all the very important aspects of comparative advantage.
Comparative advantage is the ability of an individual or group to produce goods or any particular economic activity at a lower opportunity cost (more efficiently). The story of the production of the Planet Money t-shirt demonstrates how comparative advantage allows the shirt to be produced at lowest overall cost. The four main stages of production illustrated are: cotton, machines, people, and boxes. The cotton is grown within the U.S as it is the largest exporter of cotton in the world as a result of massive land and machinery which yields cotton efficiently at the lowest cost. A single cotton field in Missouri yields enough cotton for 9 million shirts. The cotton was then exported to Bangladesh or Columbia where workers who work for lower wages in factories make the shirts. Every component of the t-shirt making process plays a role in comparative advantage which results in the production of a short for less than a dollar per shirt, which allows production at the lowest possible cost.
Marcus Ellis
1st Period
The company, Planet Money shows a comparative advantage all around the world. This company efficiently uses the idea of comparative advantage to make t-shirts at a lower cost and sell them at a higher cost. This concept happens when one country is able to produce a good or service at a lower opportunity cost than another country. In the video, it was not fair how the woman in Bangladesh had a tougher life than the woman in Colombia. Both women performed the same job, but they receive different salaries. The United States has an advantage over cotton, and the cotton is transported to various countries like Bangladesh and Colombia. Workers in those countries receive cheap labor for how much work they do. The specializations of all of these countries make the production process reduce its opportunity costs because of the inexpensive labor. Comparative advantage in this situation was highly observed through the differences in the wages of the two individuals with the same labor.
For the previous comment.
Tejiri Okukpe
Period 1
Period 2
From the journey of the T-Shirt, comparative advantage comes in the form of cotton production versus all other aspects of developing the shirt, including manipulating cotton and transportation. The United States has been producing cotton since its origin and has only gotten better in time thanks to genetic engineering and advanced farming tools, so it would be most efficient to make it here. The United States continues to produce that which it has been producing for centuries, so getting cotton from other countries lacks practicality. Consequently, most of the curating aspects of the T-shirt are put into the hands of other nations, specifically the third-world or other developing countries. Places like Indonesia, Colombia, and Bangladesh turn out to be the best places for this part of the creation, as the human labor wages can be low due to already rampant poverty. The labor capacity to operate machines or manually spin cotton into thread there is higher than in the United States, so they house more factories for developing the shirts. Poverty also creates an involuntary incentive for citizens of these countries to perform mundane tasks for little compensation. Provided socioeconomic conditions include cheap but superb output and convenience for domestic businesses. Additionally, leaving the transport of the shirt to other nations can minimize the price of producing the shirt and maximize the gross cost of the T-shirts.
Comparative advantage is when a country produces goods and services for a lower opportuniy cost than other countries. In the five chapters of the documentary we are taken to multiple countires. The Planet Money T-shirt porrays how different countires come together to produce objects at the lowest price possible, so that not just one person ,or country, has to do everything themselves. An example of this in the documentary is when the t-shirts are physically made in Bangladesh. Instead of the seller of the shirt picking each individual piece of cotton and making it into fabric and then sewing it each part of the process is done in a paricular place where they specialize in doing each specific part. Each component of the Planet Money T-shirt process plays a role in comparative advantage which overall leads to the lowest overall production cost allowing more profit to come intot he buisness if less money is put into making the shirts.
Sophie Wedgeworth
5th Period
Alan Cummins
4th Period
The production of the t-shirt highlighted in the Planet Money t-shirt project shows the effectiveness of comparative advantage. The shirt-making process starts in Mississippi, where on the delta of the aptly named Mississippi River, cotton is grown and picked on a large scale. The Mississippi River delta has the perfect climate for growing cotton alongside with very nutrient-rich, fertile soil. The state of Mississippi and the southern region of the United States have a comparative over anywhere else because they can produce raw cotton for lower opportunity costs. The same concept applies for the processing of the cotton by machines in Indonesia. The men's shirts were produced in Bangladesh and the women's shirts were produced in Colombia because each location had a comparative advantage to producing their respective styles of shirts. Both Bangladesh and Colombia have an advantage over smaller (both population and area), landlocked countries, for instance Nepal or Luxembourg, because they both have large workforces and access to sea ports. Finally, the shirts were shipped to Miami rather than somewhere far inland like Billings, MT, because Miami has a comparative advantage due to its ports and easy transportation access. Overall, the t-shirt is produced using the concept of comparative advantage so that the cost of production is minimized.
I learned a lot from the 5 videos on the process of cotton all the way to a T-shirt. The Planet T-Shirt production model displays comparative advantage from around the world. This is shown in various places such as Columbia, USA, and Bangladesh. Planet T-Shirt utilized all of these locations to create the cheapest shirt possible. The video showed that shipping costs about 7 cents, raw materials cost about 60 cents, and making and designing the shirt costs about 90 cents. They said the final process of shipment of the shirt to the customer is approximately $2.50. The videos showed how the USA is the most prominent producer of cotton and that is due to GMO's and advanced technology. A single cotton field in Missouri yields enough cotton for 9 million shirts, which is enough to give a shirt to every resident in NYC. From this, the cloth is shipped to factories to be made into yarn. After that, shirts are made in both Columbia and Bangladesh who pay drastically different salaries. People argue whether this is a good thing or not for countries such as Bangladesh and I believe it is inhumane and very unfair. One the shirts are made they are then shipped off through shipping containers to different locations which make the print for the shirt. All of this is displays the essential and harsh truths of comparative advantage.
Cameron Walker
4th Period
comparative advantage is displayed in the documentary planet money in multiple ways. comparative advantage is the allocation of resources (land, labor and capital) between nations. in this documentary you can see how the shirt starts in the us and makes its way around the world. this shows that instead of companies just processing the cotton in America they go to other countries where they could get cheaper labor. this is how the documentary demonstrates comparative advantage
Jacob rice
period 1
Comparative advantage can be clearly seen in the creation of the Planet Monet T-shirt. Each country specializes in a specific process utilized in the creation of a t-shirt. This is beneficial because one country has a higher opportunity cost of making an item than another country, making it more effective for that country to produce an item. Bangladesh can produce clothing much cheaper than the US therefore, they can produce clothing because they have a larger unskilled population which can produce them more rapidly. Countries like that are commonly used by large countries to manufacture their products because of this. Sadly, though this leads to poor working conditions and wages given to the workers. The shipping is also cheaper than inside the US, and it can be rapidly transported from place to place. This system is far more effective, that producing everything domestically because the costs would be much higher than outside.
Mia Harris
2nd pd
By watching the videos, the idea of comparative advantage becomes easier to grasp. In the production process of the Planet Monet T-shirts, different countries each contribute to the end result. The reason why this is useful is because if each country works hard at what they specialize, the most profit can be made. In this example with Planet Monet, the lowest cost T-shirt can be produced if each country does a certain task. For example. Bangladesh produces clothing at a much lower cost that other countries, so their country would specialize in the production of clothing to ensure the cheapest and most efficient route of production. If all manufacturers utilize comparative advantage, they can maximize profit while minimizing the cost.
Kenneth Easo
4th Period
Comparitive advantgae is demonstrated thorugh the production of cotton as shown in all these videos. Inodnesia processes them by the spining methods, lays them down, and straightens them. Colombia holds them down into ropes, twirls them, strectches and twists them, and creates yarn. The next step occurs in Indonesia, where the circular knitting machine is used to make the yarn turn into fabric. These three countires specialize in one way of using the cotton into production, therefore a more efficent implementation occurs. Men t-shirts are made in Bangledesh, women t-shirts in Colombia. The boxes video shows that people around the world recieve those t-shirts at a lower cost. Comparitive advantage allows trade to present efficient usage globally.
Meryem Pecen
1st period
Elizabeth Stech
Period 4
The concept of comparative advantage is very prominent in the making of the Planet Money t-shirts. Comparative advantage refers to the ability of any economic contributor to produce goods and services at a lower opportunity cost than other economic contributors. The documentary does a fantastic job of showing the different stages of making an everyday product in the most efficient way possible. For example, the cotton for the factory is obtained from the US due to its abundant supply of the crop, and it is then sent to countries like Indonesia with effective machines to be processed. This shortens the amount of time to produce a t-shirt and also maximizes the profit of the company/producer. If every single part of the process of making a Planet Money t-shirt was done in one country, the shirt most likely wouldn't have the ability to be created at such a fast rate. Ultimately, comparative advantage has the ability to benefit the producer as well as the consumer.
The concept of comparative advantage is seen in the making of the planet money t shirts. Different countries specialize is many different things and comparative advantage is where a country specializes in one industry with the lowest opportunity cost compared to others. This concept is helpful because it showed how much is gained and how much is lost as well as the opportunity cost a country has compared to another country by comparing the price. Since the U. S is a major country know for growing cotton, the United States picks the cotton and then ships it off to other countries, the low end, third world countries such as Colombia, Indonesia, and Bangladesh. The benefit of them shipping it off to places like that is that they so it at a lower cost, due to the fact that they do it at a Lower price and work for s lower price win high efficiency rates.
Danni Hertel
Period 1
Planet Money uses comparative advantage to make the T-shirts at the lowest possible price. To summarize, comparative advantage is making goods where they have the lowest opportunity cost to make it. Planet Money uses cotton grown in the US because the huge amount of technology makes it cheaper to grow here as opposed to another country, being more expensive. This, in turn, provides job opportunities and cheap operating prices. For their country, these people would do anything, putting up low wages, the long hours, and all of the hard work, they wouldn’t change a thing. Comparative advantage helps to allow for cheap goods to be made and for the company.
The Making of the Planet T- shirt exemplifies comparative advantage because each place of production has role which is most convenient. The T-shirt gets it's cotton resource from America because America is "cotton king", and exports more cotton then any other country in the world. They do this because it's more efficient. Thus, America has a lower opportunity cost in making cotton than the rest of the world. Labor is also a resource which is allocated. In the case of the T-shirts, the labor needed to make them is allocated to Colombia and Bangladesh. It is particularly allocated to Bangladesh because producers can have their shirts made for one of the lowest wages in the world. This allows for a greater level of production and and profit. Transportation is also a resource considered. The shirts go from Bangladesh to Colombia, because the cost of transportation is the extremely small 0.07 cents. Because the U.S specializes in cotton, and Bangladesh specializes in textiles, they can benefit each other by only focusing on one that because that's good of their's which has a lower opportunity cost on their side. This then exemplifies the the idea of comparative advantage, which is when a country can makes goods more efficiently than when it can make another.
Emily Tran
Period 2
Comparative advantage is a technique demonstrated by the story of the production of the Planet Money T-Shirt. Certain nations use this technique as a way to produce goods at a lower opportunity cost that benefits both that nation and other ones as well. Through the story of the production of Planet Money t-shirt, we can see that comparative advantage is used in each step of the process. To accomplish the first step, obtaining cotton for the shirt, we turn to examine why the US was chosen as the nation to harvest the cotton. Harvesting cotton in the US can be done at low prices and also at a low opportunity cost. Due to the use of our high tech machinery, the US is known worldwide to be one of the main exporters of cotton. The cotton is sent to countries like Columbia or Bangladesh where the cotton can be woven into fabric. The cotton is sent to countries such as these since there are lower wages in the factories over there which means that the shirts can be made for cheaper. Each process is making the Planet Money t-shirt is shown to have a component of comparative advantage which allows for the shirts to be made cheap and at a low opportunity cost which benefits all countries involved with the production.
The term comparative advantage refers to the ability of an individual or group to carry out a particular economic activity, such as making a specific product, more efficiently than another activity. The five-part documentary on Planet Money’s t-shirt project illustrates the use of comparative advantage and international trade almost perfectly. The project began in Mississippi, where cotton seeds were genetically modified to withstand pests and herbicides. The raw cotton, which ended up costing only 60 cents per shirt, was then shipped to foreign countries, including Colombia, Indonesia, and Bangladesh, to be turned into fabric. In these countries, the shirts are assembled and printed on at 90 cents per shirt. The finished t-shirts are then shipped back to the United States in containers for only 7 cents. Finally, the t-shirts are shipped out to consumers. This stage is the most costly of the entire process, as each shirt is shipped at $2.70. If the company were to make the t-shirts organic and completely domestic, they would have been way more expensive, leading to lower consumer demand and, in turn, less profit. However, the comparative advantage and specialization of foreign countries made the process of making the t-shirts far more efficient and profitable.
Säng Kirsten Ebueng
2nd period
Wesley Cherry
Period 4
the 5 part documentary very clearly shows comparative advantage in action as each portion of the process of aking a t-shirt is broken down and done in different places. The growing of the cotton is in mississippi. The making and printing of the tshirt is done in bangladesh and colombia. It is then shipped to the warehouse to be sold. The fact that each of the parts of making a t-shirt are done in different places shows how economies are specialized for specific goods and sevices to provide the most efficient production possible. Mississippi is best at growing cotton while bangladesh is best at weaving the cotton into fabric and then forming the shirt due to its larger labor force. If Mississippi were to make the entire shirt, it would be much less efficient as it could not be done as quickly or as cheaply as bangladesh. Thus, Bangladesh holds a comparatice advantage over Mississippi in the weaving of cotton into fabric. Hence, why cotton is shippd from Mississippi to Bangladesh to be woven. This no only provides quicker and cheaper alternatives for producers, but also cheaper goods and services for the consumer.
Comparative advantage is when an individual or group (in this case a country) can produce a good at a lower opportunity cost than another individual or group (another country). In this case, The US has the comparative advantage of producing the cotton and making it into yarn. However, when compared to Bangladesh and Colombia, the US does not have the comparative advantage to produce actual t-shirts. For us, as shown in the Planet Money Documentary, it would be more efficient and less costly to instead have the t-shirts created in Bangladesh or Colombia. This gives Colombia and Bangladesh the comparative advantage over the US in creating tshirts. Together, the three countries create an efficient work cycle that helps mass produce t-shirts, using each countries comparative advantage to their full potential, instead of just relying on themselves to produce it, knowing that it would be less efficient. This work relationship has also served as a way to provide jobs to the poor in all three countries, specifically Bangladesh and Colombia, and given their workers the opportunity to create new and better lives for themselves.
The documentary covering Planet Money’s t-shirt project illustrated exactly why comparative advantage and international trade go hand-in-hand beautifully. Comparative advantage occurs when an individual, business, or country can produce at a lower opportunity cost than a competitor can. Beginning domestically, cotton seeds are genetically modified so that they can resist pests and herbicides that hinder that growing process. The cost of the raw cotton totals at 60 cents per shirt. Next, the raw cotton is sent to Colombia, Indonesia, and Bangladesh. In these foreign countries, the cotton is turned into fabric, the shirts are sewn up, and the design is printed on them. This costs 90 cents per shirt. The shirts are then packaged up in a container to be shipped back to the United States. This costs only 7 cents per shirt! Finally, the shirts are sent out to consumers for $2.70 per shirt, making this last step the most expensive out of the process. Although is seems as if more work is being done than in the shirts were made organic in the United States alone, this process maximizes efficiency and profit for Planet Money. Hooray for specialization and international trade!
Amber Montemayor
2nd period
This story with the videos have been a great way to see and understand how t shirts, as well as many other products, are made. It is also insightful when it comes to the costs of manufacturing. Comparative Advantage is evident through the story of Planet Money t shirt because not all parts were from one country or location, and it was the cheapest way to manufacture the t shirts. It is interesting to see how much it costs to actually produce the shirt and transport it, knowing how much most basic t shirts cost. It is terrible for people to work in such poor conditions and receive such low pay, but something is better than nothing. One thing that is often not mentioned is that $10 in the US has less value than $10 in another country, or maybe it has more value, meaning it has less or more purchasing power. Also, in many developing countries, it is a lot easier to point out the problems of poor working conditions than it is to actually fix them. There is little money, so it would be difficult to improve the work conditions. The reason a product is manufactured where it is is because it is the cheapest and most reliable place. If it became more expensive in order to make the working conditions better, companies would have products made elsewhere. thus jobs would be lost in that location. T shirts might be made in Colombia because the labor is cheaper, Cotton might be grown in the US because it is done more efficiently and on a larger scale.
Robert Slaybaugh
4th Period
Comparative advantage allows a company to get something done in a cheaper way somewhere else as opposed to doing it in their own countries. Especially looking at more developed countries, they have a better advantage producing goods in less developed countries because of the low wages much like the T-Shirt video demonstrated. In America, our advanced technology and agricultural methods allow us to grow cotton as opposed to a country with less technological innovations. By doing so, we can then ship the cotton to countries that will process and create a T-Shirt for a much lower opportunity cost than what it would have been to produce the entire T-Shirt in the US. Moreover, the surplus of people seeking jobs for a small pay allows large companies to get things done in for a much cheaper cost, for they are using a largely unskilled labor force as shown in the video.
Isabel Zhou
5th Period
The Planet Money T-shirts are produced in various countries and each country is responsible for making and using a certain material that adds to the creation of each t-shirt for the cheapest prices. Comparative advantage allows each country to make each shirt for a very cheap cost. The four components in making these shirts are cotton, machines, people, and boxes. To make these shirts, people use cotton is harvested in countries where labor is cheap which allows the creation of each shirt to be made at a low price. With the use of new technology and “report cards” the cotton farmers are now capable of using more convenient ways of harvesting the cotton, which in turn helps their next year’s cotton yield. Keep in mind that not every country in the world is capable of growing cotton, due to terrain or climate issues, so people tend to buy cotton from places where cotton is opulent. The next step is to spin the yarn with the machinery and new technology. The yarn is spun in third- world countries, such as Indonesia at a low cost and efficient because the labor is efficient . Next, the yarn is given to workers in Bangladesh or Colombia to be woven into shirts. Bangladesh has a large labor force where labor is very efficient. Lastly, the shirts are packaged in boxes to ship to different places across the world . The use of boxes is extremely cheap and easy because it allows businesses and workers to ship large amounts of t-shirts at a low cost. Every component of the t-shirt making process has a role in comparative advantage because of the working and growing conditions, as well as the size of the labor force in each country. At each stage, people are able to buy and sell items at the lowest prices with the most efficient labor.
William Anderson
Period 2
The production of the t-shirt, in order to keep it at its lowest price, needs to be produced at the lowest cost. To do this, the t-shirt company must consider what places have the lowest opportunity cost, in other words the highest comparative advantage. The shirt begins in the U.S which provides the cheapest price of raw materials (cotton) due to technological advances, such as the cotton picker (which reduces the cost of labor) and through genetically modified plants (which increases output). Next the cotton takes a journey to Indonesia where they have an entire factory set up to turn the cotton into fabric. The machines reduce both the cost of labor (as there is very little staff to pay) and increase output as they are able to work as quickly as possible. After it is turned into fabric it is sent to both Bangladesh and Colombia. There the shirt is sewn with the cheapest accessible labor. Bangladesh (today) is the lowest paid country in the garment business as an average worker makes about $68 monthly. From there the shirts are shipped in boxing containers which can be transported around the globe for mere pennies. The last leg of the journey takes place in the U.S where it is, finally, shipped to the consumer. Each step in the t-shirt development story took the route of least resistance as it found the cheapest way to produce the product. For example, Bangladesh has the comparative advantage of sewing the shirts over Colombia, as it was able to produce the same number of shirts for a fourth of the cost that it took to produce the women’s shirts in Colombia. Comparative advantage is all about reducing the opportunity cost by specializing and trading with other countries. So each country (US, Indonesia, Bangladesh, and Colombia) each had a specialty where they produced the most for the least.
Aileen Ramirez 1st Period
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