Social Studies - 2019-20
WG.17 a - Distribution of Economic Activities and Trade
The student will apply social science skills to analyze impact of globalization by
a) identifying factors, including comparative advantage, that influence the distribution of economic activities and trade;
(moved from WG.9)
Theme: Globalization + Interdependence
How do people respond to the unequal distribution of resources?
Do the benefits of globalization and interdependence outweigh the cost?
UNDERSTANDING THE STANDARD
Resources are not equally distributed.
Economic activities are influenced by availability of resources, cultural values, economic philosophies, and levels of supply and demand for goods and services.
No country has all the resources it needs to survive and grow.
Nations participate in those economic activities compatible with their human, natural, and capital resources.
International trade fosters
Term to know
- comparative advantage: The ability of countries to produce goods and services at lower relative costs than other countries,
resulting in exports of goods and services
Factors that influence economic activity
- Access to human, natural, and capital resources, such as
- skills of the work force
- natural resources
- new technologies
- transportation and communication networks.
- Access to funds (investment capital) to purchase capital resources
- Location and ability to exchange goods
- Landlocked countries
- Coastal and island countries
- Proximity to shipping lanes
- Access to communication networks
- Membership in political and economic alliances that provide access to markets (e.g., European Union [EU], North
American Free Trade Agreement [NAFTA])
Effects of unequal distribution of resources
- Specialization in goods and services that a country can market for profit
- Exchange of goods and services (exporting what a country can market for profit; importing what a country cannot produce
Some countries’ use of resources
- Japan: Highly industrialized nation despite limited natural resources
- Russia: Numerous resources, many of which are not economically profitable to develop
- United States: Diversified economy, abundant natural resources, specialized industries
- Côte d’Ivoire: Limited natural resources, cash crops exchanged for manufactured goods
- Switzerland: Limited natural resources, production of services on a global scale
Reasons why countries engage in trade
- To import goods and services that they need
- To export goods and services that they can market for profit
Effects of comparative advantage on international trade
- Enables nations to efficiently produce goods and services that they can trade, increasing total output
- Supports specialization and efficient use of resources