The+Goat+in+the+Rug+Reinforcing+Activity

Reinforcing activity for the goat in the rug Pretend the year is 1840. Your family moved one year ago to a sparsely populated area west of the Mississippi River. Only one other family lives within 10 miles of your house, and it is 50 miles to the next town. Each family has 50 acres of land. Each family has been producing all its own food and clothing for the past year. As the families have come to know each other, Mr. Sanchez notices that each family has some special skills and resources. The Jacobsons’ seem to have an absolute advantage in growing corn and the Sanchez family an absolute advantage in hunting meat. (A person has an absolute advantage if he or she can produce more of a product with the same amount of resources.) The following chart represents current production. Food Production Without Specialization: (Units)


 * ** Family ** || ** Corn ** || ** Meat ** ||
 * Sanchez || 8 || 10 ||
 * Jacobson || 35 || 6 ||
 * TOTAL || 43 || 16 ||

The families meet to exchange information. Members from both families want to see if they would be better off if each family specialized in what it did best and exchanged the extra goods they produced for other items they need. The following chart represents what they found. Food Production With Specialization: (Units)


 * ** Family ** || ** Corn ** || ** Meat ** ||
 * Sanchez || 0 || 20 ||
 * Jacobson || 50 || 0 ||
 * TOTAL || 50 || 20 ||

Questions: 1. In which case does each family have an absolute advantage? //[Sanchez in the production of meat and Jacobson in the production of corn.]//

2. Would the families be better off if each family produced only one item and traded with the others? Explain? //[Yes. They could produce more total units of each item; by trading they will each have as much, or more of it, of each item than they had before.]//

3. What will happen if one of the families does not produce all it can? //[If either family does not produce fully, the others will not receive as much of that good as they want.]//

// Note for teacher: The level of output in an economy can be increased through specialization. Economic specialization occurs when people produce different goods and services than they consume. It requires people to exchange goods and services, thus increasing interdependence. // // Specialization and exchange occur when there is unequal distribution of productive resources and when one party can produce a product at a lower opportunity cost than another party. This latter condition, known as comparative advantage, allows nations (or individuals) to benefit from specialization and trade, even though productive resources are unevenly distributed.] // // References: http://www.econedlink.org/lessons/index.php?lesson=57&page=teacher //