Transcript Athens and Olive Oil - MSH - Council for Economic Education

LESSON 9 – ATHENS AND OLIVE OIL
Vocabulary
Voluntary Exchange: Trading goods and
services with other people because both
parties expect to benefit from the trade.
Absolute Advantage: The ability to
produce more units of a good or service
than some other producer, using the same
quantity of resources.
FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 9 – ATHENS AND OLIVE OIL
Vocabulary
Comparative Advantage: The ability to
produce a good or service at a lower
opportunity cost than some other producer.
This is the economic basis for specialization
and trade.
Opportunity Cost: The highest valued
alternative that is given up when a choice
is made.
FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 9 – ATHENS AND OLIVE OIL
In Athens:
Producing one jar of olive oil meant giving
up one-half bushel of wheat.
The opportunity cost of
is
In Egypt:
Producing one jar of olive oil meant giving
up four bushels of wheat.
The opportunity cost of
is
FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 9 – ATHENS AND OLIVE OIL
Comparative Advantage: The ability to
produce a good or service at a lower
opportunity cost than some other producer.
Which country has the lower opportunity
cost of producing olive oil?
Which country has the comparative
advantage in producing olive oil?
Therefore, who should produce olive oil?
FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 9 – ATHENS AND OLIVE OIL
In Egypt:
Producing one bushel of wheat meant giving
up one-fourth jar of olive oil.
The opportunity cost of
is
In Athens:
Producing one bushel of wheat meant giving
up two jars of olive oil.
The opportunity cost of
is
FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 9 – ATHENS AND OLIVE OIL
Comparative Advantage: The ability to
produce a good or service at a lower
opportunity cost than some other producer.
Which country has the lower opportunity
cost of producing wheat?
Which country has the comparative
advantage in producing wheat?
Therefore, who should produce wheat?
FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 9 – ATHENS AND OLIVE OIL
The articles which it is difficult to get, one
here, one there, from the rest of the world,
all these it is easy to buy in Athens.
—Isocrates, Greek Orator (436–338 B.C.E.)
The magnitude of our city draws the
produce of the world into our harbor, so that
to the Athenian the fruits of other countries
are as familiar a luxury as those of his own.
— Thucydides,
Greek Historian (460–395 B.C.E.)
FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 9 – ATHENS AND OLIVE OIL
Vocabulary
Production Possibilities Frontier: A
table or graph that shows the various
combinations of two goods it is possible to
produce with a given amount of resources.
FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 9 – ATHENS AND OLIVE OIL
Athens’ Production Possibilities Table
Athens
All
cards
wheat
Flip
one
card
Flip
second
card
Flip
third
card
Flip
last
card
Wheat
Olive Oil
4
0
3
2
2
4
1
6
0
8
FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 9 – ATHENS AND OLIVE OIL
Athens’ Production Possibilities Graph
FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 9 – ATHENS AND OLIVE OIL
Egypt’s Production Possibilities Table
Egypt
All
cards
wheat
Flip
one
card
Flip
second
card
Flip
third
card
Flip
last
card
Wheat
Olive Oil
16
0
12
1
8
2
4
3
0
4
FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 9 – ATHENS AND OLIVE OIL
Egypt’s Production Possibilities Graph
FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY