Objectifs globaux : Understand the comparative advantages to international trade, and how countries profit from this.
Objectifs travaillés : Comparing export data, understanding the nuances of international trade.
Resources :
PDF: International Trade Vocabulary.
Video: Prawns go the Distance.
PDF: Exported Products in 2017.
PDF: Comparative advantages to specialisation.
PDF: The European Specializations.
PDF: Séance 1 Evaluation.
Contents
Activité 1
Match the words to the definitions.
1. Competition.
2. Total cost of production.
3. Economies of scale.
4. Market.
5. Profit.
6. Gains from trade.
7. Product differenciation.
A Difference between total revenue and total cost
B Decrease in the cost per unit produced when the quantities produced increase due to the distribution of fixed costs over a greater number of units
C The benefits that equilibrium price fixing in the market gives to suppliers willing to sell at a lower price and to applicants willing to buy at a higher price
D Contest between suppliers or applicants present on a market
E Sum of fixed costs and variable costs necessary for the creation of wealth
F Fictitious or real place where wealth is exchanged between suppliers and demanders, the confrontation of which allows the fixing of a price.
G Processes by which a company manages to give its product specific characteristics (objective or subjective) that competitors’ products will not have.
A:5, B:3, C:6, D:1, E:2, F:4, G:7
Activité 2
Where do your clothes come from?
- Look at the label on an item of your clothes. Where does it come from?
- Do some research. Copy this table, and check your classmates labels.
Write a short text explaining your findings.
Activité 3
The prawn supply chain in Europe.
- Copy this table:
- Watch the video and complete the table.
- In your opinion, what was the message of this video?
- Read and understand the video’s description:
« This video shows the internationalization of production which causes a product to travel many more kilometers than necessary. In total, the shrimp caught near Germany will have traveled 6,756 km to reach the German consumer. The video therefore shows that the internationalization of production has a significant environmental impact, while part of the production goes straight to the trash. »
Activité 4
Question: How can we explain international exchanges between specialized countries?
Before we start, write these two definitions.
Comparative advantage refers to whether a country has the greatest advantage or the smallest disadvantage in terms of production costs or productivity.
Specialization refers to the fact that a country concentrates on the production of a good or a service for which it has a comparative advantage and abandons other productions (in favour of another country), which it will import thereafter.
PDF: Exported Products in 2017.
Look at the graph and answer the questions.
In 2017, automotive production accounted for 12.9% of North America’s exports.
North America, Europe and Asia mainly export manufactured goods while other regions mainly export raw materials. For example, 52.2% of Middle Eastern exports are fuel exports.
Regions that mainly export fuels, such as the Middle East, are areas with significant deposits of raw materials. Regions exporting manufactured products are more developed regions, having accumulated more capital factor to produce cars or integrated circuits.
Activité 5
Comparative advantages to specialisation
PDF: Comparative advantages to specialisation.
Read the text and answer the questions.
Portugal had to give up producing wool in order to concentrate its workforce on wine production (where it had the biggest advantage) and import wool from England.
England had to give up producing wine to focus on wool production and import wine from Portugal. Indeed, England is « less bad » in the production of wool than of wine.
Each country focuses on the production for which it is relatively the most productive, world production increases and prices fall. Thus, the specialization of England and Portugal makes it possible to produce 1 more unit of wine and 1 additional unit of wool for the same cost: production increases, prices decrease.
Activité 6
The European Specializations
PDF: The European Specializations.
Read the text and answer the questions:
The European Union has a very strong technological endowment thanks to R&D support policies. The European countries provide their companies with a qualified workforce thanks to the education provided and a stimulating atmosphere for innovation thanks to research centers. The automobile, defense and chemical-pharmaceutical industries require significant technological endowments, which explains why the European Union specializes in this area.
This is undoubtedly explained by the fact that the technological endowment in the digital world is not as strong as that of the United States and China. Note the fact that the EU is made up of very heterogeneous countries in this area no doubt explains this finding.
Digital technology is a fundamental economic issue for the future. It is crucial for the European Union to step up its research and development efforts in this area so as not to be left behind in international competition in the areas which will be the most promising.
Activité 7
Answer questions about this lesson.
What are the foundations of international trade and the internationalization of production? – Séance 1