PS 2120 International Politics

Economics in a World Context

II. In Economics, Structure matters

A. Microeconomic theory

B. Individual consumers and producers have little choice.

III. Globalization makes structure more powerful.

A. Globalization increases the Structure’s scale.

B. Countries and regions lose the ability to make choices for themselves.

Friday’s Main Points

1. Economics is the study of how scarce resources are distributed.

2. To Economists, structure matters.3. The textbook’s critique of the modern

world economy is that structure matters too much

Today’s Main Points

Trade occurs because countries have Comparative Advantage.

This trade allows gains from specialization.

I. Comparative Advantage

A. Comparative advantage means being relatively better at producing something.

I. Comparative Advantage

A. Comparative advantage means being relatively better at producing something.

B. Specialization makes the whole pie get bigger.

Today’s Main Points

Trade occurs because countries have Comparative Advantage.

This trade allows gains from specialization.

You should be reading…

“Trade and Globalization”

Handout