10/31/11

• Global Trade
• More commodities can be made in different places
• Productivity is more efficient and faster
• Beneficial environmental impacts terms of land usage
• What makes trade beneficial
• Smithian notions
• Specialization results in less time spent learning and more time spent producing/resting
• Specialization involves more time devoted to the specific field
• Specialization allows an extended market
• Recardian notions
• Comparative advantage lowers production costs
• Transactions Costs
• definition: cost of negotiating costs and agreements
• 3 main costs
• Physical
• Insurance of Opportunity
• what is given up for what is chosen
• Interference