Extra Credit (Spring 2008)
Extra Credit (Spring 2008)
Middle and high school activity (grades 6-12)
Content standards: National Council on Economic Education standards 1, 5, and 6
Free trade, anyone?
Students will read an Extra Credit article on the benefits and trade-offs of free trade, create an outline of the main argument and central tenets, and play a game that reinforces the key concepts: comparative versus absolute advantage, opportunity cost, specialization, and the trade-offs of free trade.
For teacher's reference
The main argument of "Globalization: The trade-offs of free trade" is that, despite trade-offs and negative consequences of trade (for example, job loss), trade increases the overall standard of living. Thus there are "winners" and "losers" in free trade, and the answer to whether or not globalization is "a good thing" is situational.
The central tenets of the article are that
- comparative advantage results in cheaper goods and services;
- cheaper goods and services help keep prices down for consumers;
- the trade-offs to the benefits of specializing in areas of comparative advantage include the negative impact on industries without a comparative advantage and the related loss of jobs;
- the gains of free trade are not shared equally; and
- despite negative trade-offs, free trade allows the U.S. and global economies to continue to grow.
- Provide students with a copy and have them read the Extra Credit article "Globalization: The trade-offs of free trade."
- Have students outline the main points of the article.
- Provide students with a copy and have them study the handout "Glossary of Terms."
Part 1 (25 minutes)
- Introduce the concepts of globalization and the trade-offs of free trade by reviewing the Extra Credit article with your students.
- Ask students to provide feedback on the article and to outline the author's main argument and the central tenets of her position. Guide students in their discussion of the author's key points (see "For teacher's reference" above.) You may want to record the students' outlines on the blackboard.
- As a final review of glossary of terms, have the students play a brief game to review the key concepts.
- Have students form groups of two.
- Provide each group a copy of Visuals #1–5.
- Before beginning the game, explain how it will work to the students: You will read aloud each definition from the glossary of terms. Each group should select the visual (the concept) that best matches the definition and then place the visual face down on the desk so that the other groups cannot see the answer.
- After reading a definition, give the students a moment to select the visual that best matches the definition and then ask each group for its answer.
- Award one point for each correct answer. Tally the groups' scores on the blackboard.
- As a bonus round at the end of the game, reverse the form of questioning. Explain to the students that you will hold up a visual with a key concept. If a group believes it knows the correct definition, a group member should raise his or her hand. The spokesperson of the first group to respond should then be asked to provide the definition. If the response closely resembles the definition, award two points. If the answer is incorrect, do not deduct points. Instead, ask the group that had originally responded second to define the word. Proceed in this fashion until a group answers correctly. If no group answers correctly, provide the correct definition and proceed to the next key concept.
By Jennifer Staley, senior economic and financial education specialist, New Orleans Branch