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.
80 comments:
Comparative advantage is a concept in economics that a country should specialize in producing and exporting only those goods and services which it can produce more efficiently (at lower opportunity cost) than other goods and services (which it should import. Planet Money is a great example of how comparative advantage works. It started off with genetically modified cotton from the US and then transferred to Colombia and Bangladesh in which the shirts were assembled. The US is at advantage since we have better technology,diverse climate regions, and lots land that allow the US to sell cotton cheaper than any other country. Due to the vast amount of workers in Bangladesh, it is so cheap to make shirts in Bangladesh and other countries because the cheap pay-Bangladesh has the lowest pay in the world of $80 a month. The shirts being produced in other countries allow for cheaper wages and lower shipping costs. Are the shirts providing opportunities for workers or are we just taking advantage of them? The U.S. has the advantage for the raw materials while Indonesia, Bangladesh, and Colombia for the process of making a t-shirt.
Reba George
Period 1
comparative advantage is the ability of an individual or group to carry out a particular economic activity more efficiently than another activity.Which would be like making a product.People are able to make so many t shirts due to technology. The shirt starts off with the process of getting cotton from Columbia , Indonesia and Bangladesh. The cotton is processed into the technology and then shipped to another country for individuals to start making and using the cotton for shirts. This shows comparative advantage because the U.S is at advantage because we get the better end of the deal by having up to date technology that allows us to make a high demand of cotton and results in us being able to sell the cotton much cheaper than any other countries.
Mykaela Llacar
6th
The idea of 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. No one really thinks about the process in which it takes to make the T-shirt they are wearing on their back. comparative advantage is prominently demonstrated in the creation of modified cotton processed and moved through Indonesia, Columbia and Bangladesh. the US has the advantage in this sense because of the amount of technology that is available for our use to create for example T-shirts , using the cotton, for such a lesser price than other countries. the united states is at advantage for the reason of having more availability of materials tpo create a T-shirt rather than the other countries.
Katarina Shanar
6th period
Comparative Advantage is the economic reality describing the work gains from trade for individuals, firms, or nations, which arise from differences in their factor endowments or technological progress. According to this documentary, in the Bangladeshi factory where the men’s t-shirts were made, there were 32 workers on an assembly line that would produce 80 t-shirts per hour. On the other hand, in Columbia, 8 workers could produce 140 t-shirts per hour. A simple calculation reveals that the productivity, measured in t-shirts per hour per worker, in Bangladesh it is 2.5 t-shirts per hour per worker while, in Columbia it is 17.5 t-shirts per hour per worker. The Columbian workers, despite being paid three times the monthly wage that Bangladeshis are making, are 7 times more productive.
Maheen Meraj
6th period
In the production of the Planet Money T-Shirts, the products are being made in a very cost-effective process, enabling them to be created at cheaper prices than competitors, while maintaining the quality factor. Due to technology, report cards, and subsidies, the U.S is leading the rest of the world in terms of cotton production and exporting, making it the cheapest source for Planet Money to buy cotton. The actual T-shirts, however, are produced in countries such as Columbia, Indonesia, and Bangladesh, where labor is cheap, yet effective. Planet Money's men's T-shirts were spun into yarn for a decent price in Indonesia with precision and consistency at every hour of the day for 361 days a year. In addition, wages are lower there than in more developed countries, giving this part of the production process a comparative advantage in terms of opportunity cost. After the T-shirts were made, they were shipped in large metal boxes over large cargo ships, rather than in single ships. This is one reason why the global transport of apparel has soared over time-it was much cheaper and labor effective, which is the route that Planet Money took. Thus, a single T-shirt was able to complete its cycle of production and distribution for less than a dollar. With all of these tactics being implemented, from purchasing cheaper material, to producing t-shirts at cheaper wages, to transporting said products at cost-effective means, Planet Money gained a comparative advantage in their sale of t-shirts in terms of international trade.
Lujayna Taha
2nd
As the world's population has exploded exponentially, the globalization of clothing production has increased dramatically. As a result, comparative advantage has become the norm for products such as the clothing business as differently developed countries can produce specific parts of the process at cheaper costs. The Planet Money project exemplified this idea of comparative advantage and its pros and cons. The entire process from producing the seeds of the cotton and shipping it to the consumer costs only pennies showing the effectiveness of the comparative advantage. However, poor conditions and low wages in Bangladesh, where the shirts are made, come as a result of greater production and more profit. In addition, new technologies have advanced the processing of raw materials, such as cotton in the Planet Money project, resulting in greater production. With these massive machinery, less workers are needed and more profit can be made. In conclusion, the world has become profit driven resulting in the use of comparative advantage worldwide.
Angel Yeung
Period 6
The production of t-shirt highlighted in the Planet Money t-shirt project shows the effectiveness of comparative advantage. The process of shirt-making 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 Columbia and Bangladesh have an advantage over smaller (both population and area), landlocked countries, such as Nepal or Luxembourg, because they both have large workforce and access to sea ports. Finally, the shirts were shipped to Miami rather than somewhere else far inland like Billings, MT, because Miami has a comparative advantage because to its ports and easy transportation access. Overall, the t-shirt is produced using the idea of comparative advantage so that the cost of production can be minimized.
Roshni Jose
Period 1
The story of the production of the planet Money t-shirt demonstrates the principle of comparative advantage demonstrates the principles of comparative advantage. In the production, opportunity cost is demonstrated by the cheap labor in nations such as Colombia and Bangladesh. Production of a shirt would cost a fraction it would in the United States. Furthermore, countries such as Bangladesh and Colombia specialize in mass production with land and resources being cheaply available. Capital is provided by corporations and companies in first world countries such as the United States. Due to mass production, the costs of transportation is miniscule. A single cargo ship would carry tons of merchandise to their client. The application of comparative advantage in Planet Money demonstrates how developing countries concentrating on the production of primary commodities while their developed counterparts supplies them with manufactured items. This mitigates unnecessary production costs as each nation is specialized in a certain task or production. Countries would allocate its time as efficiently as possible based on its own strengths, resulting in maximum overall production. This in turn minimizes the overall costs to create a single t-shirt. With overall manufactured goods costing lower than it would without comparative advantage, our overall income level increases as we are able to buy more manufactured goods.
Henry Feng
7th period
When the planet money t-shirts are being made, they are being made in a very cheap process, having their products being made much cheaper than any other brand or store with the same quality. Due to all sorts of different factors, such as technology and subsidies, cotton production is rising exponentially in the US, which is where Planet Money buys their cotton from. However, behind this method, there is a lot of madness going on in foreign countries, such as Indonesia, where all the t shirts are produced, for a much cheaper price. The t-shirts of Planet Money were produced in Indonesia for most of the year for a very cheap price. They also don't have to pay the workers as much, which is a huge plus for the production companies. From there, the t shirts are transported in large cargo ships overseas. All of this combined helps contribute to how cost effective and cheap it is, along the overall process. When it came to the relationship of distribution and the price it required for everything, along with material, Planet Money definitely had a comparative advantage in the entire process of making the t shirts.
Blesson Chacko
7th Period
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.
Brandon Wong
7th
Comparative advantage is when a country has an advantage in making an object because they hold a lower opportunity cost. In the case of PlanetMoney, they moved their production to not as developed country like Colombia and Bangladesh because of the lower cost they would have to pay their workers. For example, workers in Bangladesh are only being paid about 68 dollars a month. However, due to the United States's advancements in technology, the company is able to make t shirts at a lower cost. Also, due to advances in mass production, the cost of transporting the t shirts is very low.
Angella Baby
Period 1
Planet Moneys T-Shirt illustrates the principle of comparative advantage, such that like many other companies that sell products, they require components of their products to be made in other parts of the world, where they can be most efficient and cost effective. Other parts of the world especially in developing countries labor wages are extremely low, therefore the comparative advantage of having part of the shirt made in Bangladesh rather than in a country such as the United states is much higher, therefore allowing the company to make its product at a much lower cost. Comparative advantage not only benefits the company making the product but it also provides opportunities for people in countries such as Bangladesh despite their low wages.
Comparative advantage is a concept where a country specializes in producing and exporting only those goods and services which it can produce at lower opportunity cost than other goods and services. A great example of how this all works is Planet Money. The process begins with GM cotton from the US that’s made in labs and grown here and shipped to Colombia and Bangladesh in which the shirts are made from the cotton. The US can sell cotton much cheaper than other countries because of our better technology, and vasts amounts of land which puts us at an advantage over other countries. Bangladesh contains millions of workers in the garment Industy, Making it extremely cheap to make shirts in Bangladesh than any other countries because the cheap labor Bangladesh. The shirts being produced in other countries allow for cheaper wages and lower shipping costs.The states have the advantage for growing and selling raw materials. Meanwhile Indonesia, Bangladesh, and Colombia have a comparative advantage in the making of t-shirts due to cheaper labor, each country playing its own role at the lowest opportunity cost possible.
Christopher Tilford
6th
The concept of Comparative advantage is executed through the Planet Money T-Shirts. 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. For planet money products such as cotton being made in Indonesia and Colombia is made at a higher opportunity cost than Bangladesh. Because Bangladesh has many workers they are able to produce more at a lower cost. This makes it better for them to sell more and work be efficient. The US has the lower opportunity cost then all because they have better and updated technology that can produce more t-shirts at a lower cost. This make production easier and more efficient than all other countries. This allows them to be able to sell more and transport more for a greater cost. This shows the US is at a comparative advantage.
Camryn Pugh 6th period
The Planet Money T-shirt 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.It is the simplistic ideology of why it would be better to produce something here when it can be so much cheaper if it’s made elsewhere. 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 are made at all over parts of the world at the most minimal price. Thus, allowing everyone to buy t-shirts at show a reasonable price because it is made so cheaply.
Reeba Abraham
Period 2
Comparative advantage is shown through the Planet Money T-shirts, where every different task is done throughout the world at a lower price. Every task to make the t-shirt was done by different specialty jobs, making it and faster to create the shirts. In order to do so, the company started out with cotton grown in the US, where cotton is exported the most. Because cotton exports are high in the US, it is easier to grow cotton at a cheaper price for a higher profit. Next, the cotton is spun and made into fabric in Indonesia, a common place to make shirts, where they make high quality fabric at a cheap price. These different places show a comparative advantage through their specialty jobs. By being able to create quality shirts at a cheaper price, more people are able to buy them while giving profit for the company.
Angela Fang Period 6
Comparative advantage is demonstrated in the Planet Money T-Shirt production because when ordering a large amount of shirts companies outsource to other countries for cheaper shirts. The cotton was picked from the US because of the large fields of high quality cotton. The cotton is then sent to Bangladesh which has a lower opportunity cost for making and printing shirts. The cotton is sent to different countries at different levels of production to be produced at the cheapest possible way. Because these countries are able to create similarly high quality clothes at a lower price, the company is able to increase sales and make a higher profit.
Andrew Yang
7th
The theory of comparative advantage is perfectly illustrated in the creation of a basic cotton t-shirt. The cotton is produced in the United States because of its more advanced technology, climate, and immense open land, unlike other countries. The shirt however is made in other nations, like Bangladesh and Indonesia, where it can be produced at a lower opportunity cost. And to maximize profits, the U.S. buys the shirts back cheaply. The comparative advantage allows the U.S. to produce as many shirts as possibly at a fair price, and also allows the other nations to employ workers who would not have a job otherwise.
Christian Toy
period 1
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.
Edward Joseph
Period 2
Comparative advantage is the idea that when a country can produce a product more efficiently than others, it is benefiting more from the economy than its competitors. In Plant Money, we see the high efficiency of the American tshirt market. Compared to the price paid to manufacture shirts, companies are overcharging consumers for products that are not worth the cost. People in Bangladesh and Colombia are being paid lower wages than they would be paid in America for completing the same task. Comparatively the United States economy is banking on the underpaid citizens of poorer countries, giving them an advantage in the market because they make so much profit.
Juliana Quintana
Pr. 6
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.
Hunter Boyd
Period 6
Planet money t-shirt exemplifies the idea of comparative advantage, which is when one country can produce a product at a lower opportunity cost than another country. The cotton that is used to make the t-shirts is from the United States, however, that cotton is then shipped to other countries, such as Bangladesh that can produce the t-shirts with the newly imported cotton, at a lower cost than if they were made in the US. With the t-shirts being at such a low price, the United States then buys back the shirts gaining the most profit from the whole global transaction. By doing this, the United States is benefiting from the comparative advantage while these other countries that actually produce the shirts are not.
NIkita
Damodaran
Period 2
In a factory system, the specialization of workers enables the maximum efficiency as much as possible. Turns out, same goes for almost anything produced in this world. If a multi-million (or perhaps multi-billion) company desire to produce something, it will try to find a way to do it as low as possible to maximize their profit. Thus, multiple developing countries are now "specialized" to do a certain task at a lower cost than a developed country like the United States. For the country to be specialized means (or it could not) that it has a comparative advantage towards a particular task or good.
According to the set of videos, a simple t-shirt is a long process to make -since it has to go all around the world to complete the process and to redistribute the finished product in the world market. It shows how a certain country has a comparative advantage due to the low labor cost. This economic principle of the specialization of countries is good for the global trade, but it could also be seen in a negative way in the sense that a country has to be dependent on another to stimulate their economy. Comparative advantage stimulate global trade and each of the participating nation's economy.
Michael Ibay
Period 7
Comparative advantage is a economic concept that has to do with opportunity cost or the ability to do something for cheaper or more efficiently than others. This is demonstrated in which the U.S is able to produce cheap cotton then ship in off to foreign countries. So U.S has the comparative advantage when it comes to growing cotton. But but other countries has the advantage when it comes to produce if T-shirt’s with said cotton. Being able to produce more T-shirt’s with less cost gives countries like Bangladesh the comparative advantage over the U.S.
Reece Lasris p6
The production of the Planet Money T-shirt effectively demonstrates the concept of comparative advantage. For example, throughout the United States cotton is grown and picked first hand, demonstrating a comparative advantage compared to the other countries due to the U.S. having low price on cotton seeds, genetically modified better seeds, and technologies that improve the cotton picking process. The cotton further being made into yarn and later t-shirts in other countries shows a comparative advantage as the process being done overseas is much cheaper. This phenomenon is because the people who are living in third world countries like Bangladesh are more willing to work at a much lower salary then someone who is living in the United States. Having the shirts being made in other countries makes it much cheaper for companies to export all of their raw cotton. Adding all of the comparative advantages together shows all of the costs being minimized and therefore benefiting the economy.
Matthew Manalel
2nd Period
Comparative advantage is when a country produces a good or service for a lower opportunity cost than other countries. This economic law is evident throughout the production of the T-
shirts because different countries promoted to creating this shirt for Planet Money at a lower cost. For example, people in Indonesia and Bangladesh makes low incomes, so Planet Money saves money by having the garment industry in less developed countries make their product. Not only do they save money, but they also make a large profit because they sold 25,000 shirts for a higher price than what they paid to those who contributed to making the product.
Erin John
Period 2
Products like the Planet Money T-Shirt display the concept of comparative advantage perfectly. For instance, crops like corn are heavily produced in the United States due to the environmental conditions that help supply these crops and increase supply upon demand. Overall, this demonstrates a comparative advantage since other countries do not have the environmental conditions to produce crops like corn at a rate that the United States can. Therefore, the planet money t-shirt exemplifi the concept of comparative advantage because one country can produce a product at a lower cost overall than another country. The cotton used to make t shirts in the United states is far superior in quality and cheaper overall than in other countries such as China and India. In conclusion, with shirts being so cheap to make and sell, the United States can make the most profit by selling them around the globe and by doing this the US is benefiting from the comparative advantage as opposed to other countries.
Sahib Oberoi
Period 2
Planet T-shirt demonstrated in their videos that to succeed in business you must find the cheapest way to produce your product. By using comparative advantage this company found the best price on every level of production. Cotton, which has improved over the decades from human picking to machine harvesting, and to ensure a good harvest using GM seeds, to begin with. Next with the cotton being sent overseas to be made into yarn, then to a fabric. From their being sent to factories to be sewed into the garment. Finally, the last steps, sent back via cargo ship, then mailed to a final destination, the T-Shirt company to be printed. These shirts have made an economic impact on everyone who touched the material. Even if we believe that working conditions are not what we believe to be the best, the wage they earn in their country is still making a huge economic impact in their lives. Without this they would be worse off then they are now.
Hannah Golding
1st
The story of the production of the Planet Money t-shirt demonstrates the principle of comparative advantage. 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. All of this leads to the lowest opportunity cost for the consumer, and thus represents comparative advantage.
Sumeyye Islamoglu
Period 1
The story of the shirt portrays that there is a necessary need for many countries to be involved in the role they play in the production of the t-shirts. Bangladesh and Columbia receive the cotton and are responsible for making the shirts. These countries have a comparative advantage in being able to produce the shirts for a cheap wage and labor. They specialize in their job, not necessarily out of concern for the garment industry, but because it is the means by which they receive their wages. Without their specialization and trading, the t-shirt would not only be much more expensive, but it may not even be possible in the first place. Comparative advantage is one of the most important things in economics that help with the trade between countries.
Paul Manavalan
7th Period
The principle of comparative advantage is demonstrated through the production of Planet Money T-Shirt. Comparative advantage is when a country is able to produce a good or service at a lower opportunity cost than other countries. This company is a perfect example of comparative advantage because the cotton produced in the United States is much more reliable and much cheaper than if it were produced in another country. The workers are in Bangladesh and other countries that receive low wages so the company will make profit by hiring people for less, and selling their shirts produced for a larger amount. In conclusion, by having different components of the shirt being produced in different countries and selling them worldwide, the United States is able to have the comparative advantage over the other countries.
Angie Mancino
Period 6
The movement of the Planet Money T-Shirt suggests a contextual representation of a comparative advantage situation through the use of a simple t-shirt. The materials and resources obtained as well as the process suggest a different countries in which the making of the shirts took places have lower opporunity costs. The story of the planet money shirt conveys a comparative advantage through the demonstration of the process of making a T-shirt and the numerous countries that partake in its creation due to globalization and lower opportunity costs.
Dhilan Patel
7th Period
Planet Money t-shirt utilized the idea of comparative advantage in order to maximize their supply of t-shirts at a lower cost. The article shows how quickly Planet Money is going through with this process. America has the upper hand in producing cotton at a lower cost than other countries which gives them the competitive advantage. The use of technology and labor from third world countries causes the cost to produce the t-shirts to drop. Having a large, cheap labor force causes developing countries to have a low opportunity cost than other countries such as the U.S. The shipping process is said to be the most expensive part of the process but it's really not. It's cheaper to ship a t-shirt from Bangladesh to the United States than to ship something within the U.S. Comparative advantage is shown in this process as we discover that a single t-shirt 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.
Abel Abraham
6th Period
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. Planet Money T-Shirts are made cost-efficient but also retaining good quality. The T-shirts, are produced in countries such as Bangladesh,, Indonesia, and Columbia. The women’s shirt was made in Colombia, from cotton grown in the U.S. The men’s shirt was spun into yarn in Indonesia and made in Indonesia and Bangladesh. The shirts will be shipped out in Columbia. Low wages are a point. Planet Money have a comparative advantage in selling of their t-shirts because they are based in the USA and also gets the most profits than compared to the other countries where the T-shirts of made and packed.
Linda Zhu
7th pd
Producing a product at a relatively cheaper price is an effective way of producing goods. The cotton is grown in the United States where genetically modified cotton seeds and advanced technology make it possible to export mass amounts of cotton at a cheap price. The shirts are then shipped to other countries, such as Bangladesh, for the actual production. People living in poverty are in desperate need of a source of income, and cheaper wages in developing countries, as compared to the higher wages in the US, offer a benefit for production in those countries. In the United States, a shirt’s selling price would be more expensive if it was made in the USA as compared to production in developing countries such as Bangladesh and Colombia. When it all comes down to comparative advantage, production depends on the cheapest means of producing a product, whether from the help of advanced technology (for the sake of shipping/obtaining goods in a cheap way) or by paying laborers less to produce the product.
By economic standards, comparative advantage is the concept in which one party has the advantage over other producers by having a lower opportunity costs. As seen through Planet Money t-shirts, this can be achieved through the economic factors that influence trade costs, wage minimums, labor efficiency, and raw material supply. They use their location to their advantage by stationing businesses in the United States, while building factories in countries such as Bangladesh and Columbia. The labor is extremely cheap in comparison, so that they can retain the quality of their clothing for the consumers in our first world country. Their opportunity costs are to their fullest advantage, losing very little in the shipping around the world so that they can save in the production and packaging of their products. In turn, this creates jobs all over the world, although some believe that this causes losses on the lower class economic sector of the U.S.
Angelica Miranda
Period 2
Comparative advantage entails the ability to produce a good or service at a lower opportunity cost than other companies or industries when compared to the benefits of trading. The production of Planet Money T-shirts embodies this process. By following the development of a t-shirt across the globe, the company was able to recognize certain factors of economic resources, wages, and labor that maximize the efficiency of production. The United States has the comparative advantage in producing cotton with genetically modified seeds and subsidies provided to cotton farmers such direct payments. Some can pick cotton at a rate of 100 acres a day along the Mississippi. Likewise, textile factories in Bangladesh and countries like Indonesia and Colombia hold a comparative advantage in the making of the t-shirts due to the lower wages given to the workers. Female workers receive far below the 80 dollars a month and 104 dollars a month that they want to receive, reducing opportunity cost. With the relative ease of shipping, production of cheap levels is followed by lower desired prices which may to some cause harm to the American economy.
Bryanna Godfrey
Period 1
Comparative advantage is when a country has a strong advantage, such as t-shirts in this example, in making an object because they hold a lower opportunity cost. The cotton is grown inside of the United States allows for easy production and distribution. Exports can be made to other countries such as Bangladesh, and Colombia where it is then produced. The need for clothing in these countries along with lower wages compared to the U.S. offers a benefit for both parties. Comparative advantage boils down to production in the cheapest way possible, through labor techniques or through the aid of technology.
Luke Leblanc
Period 6
Comparative advantage is when a country has a huge advantage in making a certain item in this case t-shirts due to a lower opportunity cost of making it. The main component of the product cotton is grown within the U.S as it can easily produce it with high efficiency as well as minimal cost which can later be distributed. Then the cotton can be exported to countries such as Columbia and Bangladesh where the t-shirts can be produced for very little due to very low wages for the workers who help with production as well as a need for clothing thus the low opportunity cost. Therefore comparative advantage is producing something in the most efficient as well as cheapest way possible through advantages such as technology.
Peter Martin
P.2
We can see that comparative advantage is seen in the videos as we see how much a simple thing like a t shirt is made with things all around the world. The short videos made by Planet Money t-shirt demonstrates the principle of comparative advantage as it shows all part of the process of the production of a t shirt.The process starts from us, then to Indonesia, then Bangladesh, and Colombia. Companies start by using technology to genetically engineer a raw material.That same material is then sent to somewhere with cheap labor to be created into something. Using many different countries helps by making these shirts cheaper as well as helping to stabilize their economy's.
The principle in economics of comparative advantage is most clearly demonstrated in the way how these t-shirts are made in steps that involve places from all over the world and people of many background. Because the U.S. has the best technology and large government subsidies that protect the advancement of this sector of farming, our country has become the most efficient at providing the most abundant and quality cotton than anywhere else in the world. The fact that they don't need to pay a lot of people anymore for the work, because machines do most of it, means that cotton can be produced at the cheapest rate in the U.S. This is an advantage that the US has over other countries. Meanwhile, other countries like Bangladesh who has cheaper labor costs then does not have to pay as much as other countries for the work that is being done to sew the t-shirts. This means more money being earned and lower costs for customers to buy it for. The whole world comes together to make a product by contributing a step that they are good at, by minimizing the costs and increasing the output. This is how products are made affordable and how larger quantities can be produced to be consumed.
Anson Sam
6th Period
A comparative advantage is when a job can be done or a good can be produced at a lower opportunity cost by one country than by a potential trading partner. The t shirt provides this for more than one benefactor. The company produced the t shirt with a very low cost as seen in the video. The added costs came out to be $4.27 to produce. The t shirt company in the US had better technology than others to provide this comparative advantage. The company was able to show the resources, worker wages, and the labor in the makings of production. The benefit for other countries improved their countries and aided in the growth of their economy.
Jessica Neal
2nd Period
Comparative advantage is the ability of one country to produce a good or service at a lower opportunity cost than another. This makes it best to get this good from this country because the lower cost allows for it to be sold at a lower cost and edge out competitor. Planet Money illustrates this concept as US technology and land allows for the cheapest production of cotton when compared to Bangladesh. However the population of Bangladesh makes labor cheaper, and thus is carries on the step of actually manufacturing the t-shirt. This is why there is give and take when producing products rather than one country attempting to do it all.
Jahrid Clyne
6th Period
Comparative advantage is when a country has a huge advantage in making a certain item because of the lower opportunity cost of making it. 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 only 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. These low production costs are only possible because of comparative advantage.
Mark Mufarreh 1st Period
A comparative advantage is when a job can be done or a good can be produced at a lower opportunity cost by one country than by a potential trading partner. Planet money t-shirt exemplifies the idea of comparative advantage, which is when one country can produce a product at a lower opportunity cost than another country. Compared to the price paid to manufacture shirts, companies are overcharging consumers for products that are not worth the cost. People in Bangladesh and Colombia are being paid lower wages than they would be paid in America for completing the same task. Comparatively the United States economy is banking on the underpaid citizens of poorer countries, giving them an advantage in the market because they make so much profits.
Albert Tamdjo
2nd Period
The comparative advantage is the for one product to be favored over the other. In this article, Bangladesh is measured by having 2.5 T-shirt’s per hour per worker. In Columbia they have 17.5 T-shirt’s per hour per worker. Clearly the Colombians have the comparative advantage even though the others are being paid more. Obviously other factors also effect it. Places that have a large workforce and an easy port make it easier and cheaper to transport and make goods. Landlocked countries suffer more. The price of the material in the country that you are making them play a big part. A shirt may be cheaper to make in London rather than the US making the selling price the the same but one will make more profit. The technology that is developed in each country is also an advantage. If the workforce is less at one country the people will pay them more for the job rather than the fact is they're are a lot of people that are willing to work.
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.
Raza Muhammad
2nd Period
The production of Planet Money T-Shirts demonstrates the concept of comparative advantage as it shows the trading for materials with countries that can produce specific material at a cheaper price than other. This documentary shows the whole process of making a single shirt by a certain company and the various places in the world that contribute to make a single shirt. Businesses want to make their products in the cheapest possible manner and so they can make a profit when working with materials that are cheaper across the world. 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. The people of different countries specialize in certain aspects of the T-shirt when making it and thus, the specialization allows for a smaller 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. The United States produces large quantities of cotton for a favorable price due to the vast production allowed by various machinery and great agricultural weather in the South. The shirts from Colombia and Bangladesh are then shipped in containers for maximum loads and expansion. Utilizing the cheapest raw materials and services from different countries where they can produce with the most efficiency capitalizes the ultimate goal of producing items in the cheapest way possible, while also making production at an effective rate and quality
Jibimon Noby
Pd 1
Having a comparative advantage means to be able to produce a service or product much more efficiently compared to the competition. With the t-shirts, they cost only 4.27 to produce and ship, which means that most companies are overcharging their t-shirts with simple screen print designs to increase their profit margins. As to the location of where the t-shirts are made, it's clear that Bangladesh has a comparative advantage compared to Columbia due to the low costs that come with making t-shirts in Bangladesh. In the U.S., it would be more expensive to make the t-shirts, which is why the labor is outsourced.
The narrative of the Planet Money's t-shirt conveys the principle of comparative advantage through the utilization of specialization by different nations. The raw material, cotton, is grown in the nation with the lower opportunity costs: The United States. The cotton is then shipped to Indonesia, where it can be woven into yarn for a low opportunity cost. The fabric is sent to factories in Colombia and Indonesia to be made into t-shirts at a low opportunity cost. The shirts are shipped again to the United States where they are printed and sold. Each step of the process of making the t-shirt is situated in a nation that has an abundance or low cost of the resources needed to complete the step. This is comparative advantage, where each country has specialized industries because of their unique resources.
Stephen Iype
Period 1
The story of the production of the Planet Money t-shirt demonstrates the principle of comparative advantage through the many stages and different locations that were required in order to generate the shirt. The shirt began with the material cotton, used to help create the actual shirt itself. America exports the largest amount of cotton in a year due to the fact it is able to mass produce the resource, so it was cheapest to obtain the resource in America. Once the raw material is collected, it is then sent to Colombia, Indonesia, and Bangladesh. All of these countries share one thing in common, a large amount of machinery that produces shirts. This machinery allows the opportunity cost to create and weave shirts low, so Colombia, Indonesia, and Bangladesh were the most obvious choices for making the physical shirt. The choice to have shirts produced in these countries perfectly demonstrates comparative advantage. Once the shirt is woven, it is once again sent back to America. America not only has a low opportunity cost for the production of cotton but also on fabric printing. Again this embodies the essence of comparative advantage, due to the choice of having fabric printed in the US over any other place. Each stage of the process was acted out in different areas because their opportunity costs were lower, thus demonstrating the essence of comparative advantage.
Garrett Foresman
Period 6
When a country has the advantage in making an object because of lower opportunity cost, we call that comparative advantage. Planet Money took advantage of this and moved their production to less developed countries such as Colombia and Bangladesh. By doing this they would have to pay less for the workers. In Bangladesh, workers are paid less than workers in the United States. Since the United States has a lot of technological advancements the company is able to make t-shirts at a lower cost and the cost for transferring the t shirts will be low too. This is comparatice advantage because a lot of money is saved when producing these shirts.
Camila Ferrero
Period 1
Comparative advantage is thoroughly and excellently shown through the manufacturing of cotton t-shirt. The United States’ climate and geography allow for production of cotton to be convenient and efficient. Other countries such as China and India cover the manufacturing of the t-shirt as it has a lower opportunity cost due to the massive population and work force. After the manufacturing of the shirt, the United States purchase the shirt from the manufacturing country at a cheap price. These comparative advantages allows the United States to efficiently use opportunity cost and produce many t-shirts for a low cost, while thus enabling many other manufacturing countries to provide more jobs for their people.
Javier Bermejo
Period 2
Comparative advantage is when a country can produce a good more efficiently and at a lower opportunity cost than another country, therefore benefitting more from the economy. The example that was used were American T-shirts, given that the Cotten grown to make the shirts came from within the USA, allowing for easy production. It is then exported to places all over the world, including Bangladesh and Colombia, where the final products are made. But, people in these countries are getting paid lower wages than American workers for completing the same exact task and this benefits America’s economy. This cheap labor serves as an efficient way to mass produce the shirts. The video allowed to to expand my knowledge on how a simple product must go through many stages in order to become a final product and the idea behind this cheap and effective process is comparative advantage.
Bailey Corley
Period 6
Comparative Advantage means having a lower opportunity cost for something than another country or business. Planet Money utilizes this concept in the production of its' t-shirts. The cotton was purchased in the United States, where increased technology led to more efficient and cheaper cotton production making its' cost lower. The actual spinning of the t-shirt from the cotton occurs in 3rd world countries such as Bangladesh or Columbia, where wages are lower than they are anywhere else in the world. This makes the production of the t-shirts cheap. The entire process, from cotton to t-shirt, costs less than a dollar per shirt. By utilizing comparative advantage, Planet Money can increase their profits by lowering their production cost.
Alisha Zute
Period 6
The principle of comparative advantage is a concept that states that a country should specialize in producing and exporting only those goods and services which it can produce more efficiently than other goods and services which then should be imported by other countries.The documentary and articles of the Plant Money t-shirt project display the the principle of comparative advantage in which each country involved in the making of a single t-shirt benefits from their share of the production. Though the united states has more advance technology to sew the shirt, it would be more efficient to have the fabric sewn in Bangladesh because the minimum wage is much lower than that of America,it would be more cost efficient to have the labor done in another country. Having Bangladesh specialize in labor allows their people to gain opportunities to make a living. Having the United States produce the resources, the labor, AND the packaging would not benefit anyone. Having different countries specialize in different parts of a production would allow the making of a product be more cost efficient and widely beneficial as shown in the documentary.
Irene Gratil
pd 2
The principle of Comparative Advantage comes from the fact that, naturally, everyone does what is best for them at that point in time. If a country has the opportunity to save money by trading, it will trade. The story of the Planet Money t-shirts demonstrates comparative advantage in several ways. Perhaps the most prevalent and controversial example of comparative advantage with which the garment industry is involved is the trading of materials to be sewn in Bangladesh. In Bangladesh, because the workers of the garment industry are so desperate and underpaid, it is very cheap to have shirts manufactured. The U.S. benefits from this because had the shirts been made in the U.S., it would be much more expensive to massively manufacture.
Samuel Shteyman
1st Period
The story of the Planet Money t-shirt demonstrates principles of comparative advantage in the different steps it takes to create a shirt. For example, the United States has a comparative advantage because they are able to produce more cotton than others due to genetic modifications on the seeds. The U.S then turns the raw cotton into fabric that will later be used for the shirts overseas where it is cheap. Next, the shirts are made in countries where labor is significantly cheaper to maximize profit compared.
Nia Eugene
6th period
Comparative advantage is when a country can produce a product or service with lower opportunity costs than another country. They could do this by moving to countries with workers who you could pay less and have abundant resources so that you can mass produce for a less amount of money than you would anywhere else. The t-shirt company did this by moving to less-developed countries where the workers could be paid less and they could make lots of more shirt. The opportunity costs is that the t-shirt company could pay less to make their product in the less-developed countries than the United States.
Christian Young
Period 2
Comparative ADvantage is shown throughout this story plenty of times. To start off they plant the cotton in the US because it is cheaper and in more abundance than any other country due to technology and land availability. Then they ship it out to various other countries as the labor in places like bangladesh and columbia is a lot cheaper than it would be to produce in the states. Shipping is done through the crate system because its extremely cheaper and quicker than shipping from UPS or DHL. By taking advantage of comparative advantage these companies are able to create these shirts at a very low price point very quickly increasing both their profit and sales.
Tammam ALhiraky
Period 1
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. in the video of making the T-shirt’s demonstrates these principles of comparative advantage. For example, it only took cents to do the things they needed to do to make a small part of the T-shirt and all the countries around the world helped make these shirts and then distributed to us. One part of the world will do the picking of cotton, the other part will start making the shirt and another will finish making the shirt and then send it off for delivery. Therefore, the production of the Planet Money T-shirt’s demonstrates the principles of comparative advantage.
Elizabeth Melchor
2nd period
The comparative advantage of using different companies and countries to make their shirts is very interseting. When the prices of everything that goes into the t-shirts is broken down, it really shows how little the monetary cost is for a t-shirt. If all the manufacturing and shipping had taken place in one area, prices would've been higher. It is incredible to see how this affects people who make such seemingly simple things. The amount of travel these shirts have gone through shows the extent of the value of opportunity cost.
Keegan Jones 7th
The production of Planet Money t-shirt shows comparative advantage as different stages of production takes place in different areas of the world. Firstly, the cotton used in making the t-shirt is taken from the United States. Cotton can be grown in the countries where the t-shirts are made but most of the cotton used came from the U.S due to advanced technology and government subsidies. Therefore, the U.S has the comparative advantage for producing cotton. The next step is spinning the yarn for the t-shirt and that takes place in Indonesia. Indonesia has a comparative advantage to other countries as they have an educated workforce and cheap and reliable electricity. The labor used to make these t-shirts come from Bangladesh because Bangladesh has the highest comparative advantage due to their cheap labor costs. It is said that 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. Due to this the t-shirts are shipped worldwide in shipping containers because of their efficiency. The production of the planet money t-shirts demonstrates to us the different people, processes and countries and their comparative advantages that lead to the manufacturing of the shirts.
Jeslin Johny
1st period
Comparative advantage is defined by economists as the ability of an individual or group to carry out an economic activity more efficiently than another activity. Bangladesh has the ability to produce products cheaper as the government does not set a minimum wage, so employers can pay their workers pitiful wages. Since the population of Bangladesh is enormous, people will not complain as it is better to have a low-paying job than to not have a job at all. Some countries have a comparative advantage in that they have plenty of resources to export for the making of clothes, such as the United States.
Jerin Jose
Period 02
The concept of comparative advantage where certain groups or people are able to perform tasks or jobs at a more efficient and affordable rate is heavily prevalent throughout the entirety of the documentary. The overall specialization of specific tasks allow nations and people to focus on being as efficient as possible with what they do. The documentary exemplifies this by showing how the t-shirt progresses throughout the production in a variety of places around the world due to the fact that each specific step is cheapest for the corresponding locations.This concept is extremely important in almost all the decisions which have to be made in consideration of the shirt production. Although the cotton can be grown near the production plants reducing shipment costs, the company still chose to export U.S. cotton due to the use of genetic modifications which provide more uniform and higher quality fibers. And although the U.S. might be able to make the shirts at a faster rate with its advanced technology, it is still made in Bangladesh due to the extremely low minimum wage. Immense amounts of thought and planning go into each step in order to ensure that the company can make the most of each country's specialization and/or comparative advantage. The overall intention of the company is to be as efficient as possible in order to increase profits, which can be accomplished through the use of comparative advantage.
Paul Nguyen
2nd Period
The production of a t-shirt shows a comparative advantage by delegating different stages of production to different parts of the world reducing the costs and making the process more efficient. It is insane to think about how a simple everyday T-shirt was made in many different parts of the world, not just the place on the tag of the t-shirt. It is also interesting to think that producing a t-shirt in one part of the world would cost more than the different stages divided out throughout the world considering the distance the materials must travel. By dividing the work each country became more efficient and able to reduce the costs of making a t-shirt by having the U.S. pick the cotton, spinning yarn in Indonesia and making the shirt in Bangladesh. Also due to technological advances transportation has became cheap, in which global production is cheaper than local production.
Ashley Odstrcil
7th period
Comparative advantage is demonstrated for the Planet Money t-shirts in multiple areas such as cotton production, labor costs, and shipping. They started with cotton in the US because it was abundant and cheaper than anywhere else. Next they ship to countries that have lower costs of production so that they could create more shirts for less. They also ship to places like Indonesia because their yarn spinning machines can produce more output for less than in the US. They also reduced cost by shipping in bulk by crates/containers which was delivered overseas. Overall, by calculating costs and applying comparative advantage they were able to reduce the costs of production and increase their profit substantially.
Kollin Chang
2nd
Comparative advantage is demonstrated for the Planet Money t-shirts in multiple areas such as cotton, production labor.Cotton was very abundant at the time to incluser it was cheap. Also, t could be made in factories in underdeveloped countries for higher profit.Outsourcing is very key to development of cotton.
Danielle davis 6th
Comparative advantage is when a person or group creates a product or service more efficiently at lower opportunity cost which is utilized when U.S.has technology to produce more cotton than other countries due to the amount of machines available.While Indonesia have an sophisticated class of workers but cheaper labor so they make more profit.The Indonesia people were played less than Bangladesh but produce more T-shirts.They divide the labor as U.S.profuce cotton sent to Indonesia for the T-shirts to be made,Bangaladesh lowered the shipping costs so global market help the economy by specialization of labor in the process of creating the T-shirt.
Kenan Edwards
6th Period
Comparative advantage is when task are create and designed to be more efficient, with a much lower opportunity cost. This is seen throughout the creation plant money t shirts. From the
farming of thr cotton, production, abd shipment
. Cotton is farmed in places where it is cheap to grow and obtain, like in the US. The cotton is then shipped to lower class counties where wages are much lower than the US, and thus cost less to make. Shipments are also reduced by shipping in bulk rather thab smaller packages. Comparative advantage allows for countires to produce more with less of a cost. They take advantage of opportunities that make more profit, and are easier to maintain.
The theory of comparative advantage is an economic theory about the work gains from trade for individuals, firms, or nations that arise from differences in their factor endowments or technological progress.Planet Money is a great example of how comparative advantage works. It started off with genetically modified cotton from the US and then transferred to Colombia and Bangladesh in which the shirts were assembled. The US is at advantage since we have better technology, diverse climate regions, and lots land that allow the US to sell cotton cheaper than any other country. In Bangladesh, workers are paid less than workers in the United States. Since the United States has a lot of technological advancements the company is able to make t-shirts at a lower cost and the cost for transferring the t shirts will be low too. This is comparative advantage because a lot of money is saved when producing these shirts.
Benjamin Sunny, Period 6
Comparative advantage is where a country specializes in producing and exporting only those goods and services which it can produce at lower opportunity cost than other goods and services. The production of planet money t shirts showcases comparative advantage by they moved their production to a not as developed country like Columbia and Bangladesh since they could pay workers less. Due to advancements in technology they can make t shirts at a lower cost. It also provides people in low wage countries with jobs.
The Planet Money T-shirt shows the need of many different countries in the production of making a t-shirt. For comparative advantage to be in full effect, companies must find the cheapest supplies and labor. Low production costs are utilized when purchasing the cotton, technology is used to replace human workers during processing, and low wages are found for the production of the t-shirts. Using multiple countries cooperation in the production process allows for the cheapest prices to be found and utilized.
Sarah James
2nd
The Planet Money T-Shirt shows how many countries are involved in the production of such a simple item like a t-shirt. It shows comparative advantage which is when a country specializes in making and exporting items that can be made at a lower opportunity cost than other items. This is very evident in the Planet money t-shirt game because they moved their production to lesser developed countries. They can pay workers less and make more shirts.
Matthew Benton
6th period
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. In this case, the use of machines to harvest Cotten have made farmings cotton more efficient and, reduced the farm’s spending due to machines doing most of the hard labor. Almost everything is done by technology when it comes to farming, even the seeds that they use are Engineered to produce the best Cotten possible. America is the leading exporter of Cotten in the world and in this video, 9 million shirts can be produced just in one farm alone (video). Companies turn to less developed countries to manufacture the shirts due to cheap labor.
Comparative advantage is the ability of a country to be able to specialize in a specific task with the least opportunity cost. As of the Planet Money T-shirt, it shows how T-shirts are produced around the world with Indonesia, Bangladesh and Columbia all involved in the task to make the T-shirts after the U.S. produces it's intermediate good, cotton, with technology. The U.S. has the comparative advantage since it has more superior technology such as it's truck to just tear through the cotton, and those IPhone shaped things that were used to grow food. However, Bangladesh, for example, had to use human labor, where human error can, as a result, cause a higher opportunity cost. Therefore, due to other countries' economic conditions, the U.S. has a higher comparative advantage by being able to move their manufacturing to poorer countries, where due to there current economic conditions, they can pay them less.
Divya Aaloori-6th period.
In the U.S. we specialize in cotton through the use of government subsidies to protect farmers. This gives the U.S. a comparative advantage because the cotton is in turn monitored by the USDA so you get the perfect product everytime. Indonesia is where the cotton went and they had a comparative advantage because they are a developed country but can pay their workers little, making production heap and profitable. The next step was for workers in Bangladesh to make the shirts. Bangladesh has a comparative advantage because their minimum wage is only $68 a month and many farmers migrated to factories from farms giving them ample cheap labor. The last part is shipping where the use of containers gives a comparative advantage because the cost to purchase is high but then the advantage is given to those who have the money to start, so in more developed countries.
Brian Rivette
6th Period
In the U.S. we specialize in cotton through the use of government subsidies to protect farmers. This gives the U.S. a comparative advantage because the cotton is in turn monitored by the USDA so you get the perfect product everytime. Indonesia is where the cotton went and they had a comparative advantage because they are a developed country but can pay their workers little, making production heap and profitable. The next step was for workers in Bangladesh to make the shirts. Bangladesh has a comparative advantage because their minimum wage is only $68 a month and many farmers migrated to factories from farms giving them ample cheap labor. The last part is shipping where the use of containers gives a comparative advantage because the cost to purchase is high but then the advantage is given to those who have the money to start, so in more developed countries.
Brian Rivette
6th Period
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