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1. One of the misconceptions of the theory of comparative advantage is that international trade causes exploitation of countries that pay low wages. Do you agree with this? If you were a Mexican worker working in one of the Gap or Wal-Mart sweatshops in Mexico making a "guaranteed" dollar an hour, would you call that exploitation?
2. Explain David Ricardo's theory of comparative advantage. How does comparative advantage differ from absolute advantage? What is the relationship between comparative advantage and gains from trade?
3. Define both internal and external economics of scale. How do economies of scale play into trade between two countries with one factors of production?
4. Consider the role of resources in international trade. Do you believe the rise of globalization has caused the outsourcing of manufacturing jobs within the United States, or is this a natural progression due to the technological era we are in? What trade legislation has affected items that are "Made in America"?
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