3rd Grade Social Studies
All About Trade
Unit 8
Unit 8
Interdependence, Trade, and Voluntary Exchange.
What is Interdependence? How is it related to Trade?
Interdependence is the process of two or more people, places, or things depending on one another. When two countries trade goods, they rely or depend on each other!
Watch this video to learn more about interdependence!
What is Voluntary Exchange?
Voluntary exchange is the act of buyers and sellers engaging in market transactions (the purchase and sale of products). Ideally, these transactions happen freely and willingly.
Watch this video to learn more about voluntary exchange!
What is Opportunity Cost?
When economists refer to the “opportunity cost” of a resource, they mean the value of what you're missing out on by producing or buying a certain good. If, for example, you spend time and money going to a movie, you cannot spend that time at home reading a book, and you can't spend the money on a pair of shoes, a candy bar, or another purchasable item.
Watch this video to learn more about opportunity cost!
What is Trade?
Trade is the exchange of something for something else, typically as a commercial transaction (buying and selling). Countries trade with one another when it is cheaper to produce a certain good in another country, or if another country has a lower opportunity cost when producing a certain good. By trading, all countries are able to get more of what they need and want!
Watch this video to learn more about why we trade!
Currency
What is it and how is it used?
During trade, countries must exchange currency (the specific type of money that a country uses). Each country has a different type of money or currency. For example, in America, we have American Dollars, but in Mexico, citizens use Pesos. In much of Europe, Euros are used.