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Week 15 · Assignment: Traditional alternative (no AI)

Week 15 — Grain, Pottery, and a Duty at the Border: Two Regions Trade — Traditional alternative (no AI)

Introduction to Business Free sample edition
Traditional alternative (no AI), unpublished. In the course this is a separate assignment that ships unpublished beside the adaptive assignment: same objective, no AI. An instructor who prefers it publishes it and unpublishes or deletes the adaptive one, as the note at its top says.

Instructors: publish this instead of the adaptive version if you prefer, and unpublish or delete the adaptive one.

Assignment 14 of the term — compute an opportunity cost and a tariff duty, assign comparative advantage, and choose how a small business should first sell across a border.

This week you learned why nations trade; how absolute advantage differs from comparative advantage; how to build an opportunity cost one ratio at a time and find a swap rate that helps both sides; the barriers to trade and who owes a tariff at the border; how to read the trade balance; and how a firm climbs the entry ladder from exporting to direct foreign investment. In this assignment you work one small two-region case, compute two figures, choose a small shop's first step across a border, and explain comparative advantage to someone who has never studied business. This week's lecture tutorial, quiz, discussion, and Business Case Workshop practise the same ideas from other angles.

The task

The case is illustrative, built for this course and not real data. Two neighboring regions, an upland region and a lowland region, each make grain and pottery. Like the coffee cart in this week's chapter, the case has no named people.

The case's figures:

  • In one worker-day, the upland region makes 15 sacks of grain or 5 crates of pottery.
  • In one worker-day, the lowland region makes 8 sacks of grain or 2 crates of pottery.
  • A small furniture shop in the lowland region imports 7,500 dollars of chairs from a maker in another country, and an 8 percent tariff applies when the chairs reach a U.S. port.
  • The same shop builds its own handmade tables and wants to start selling them in the upland region's markets across the border. The owner has little money to risk but cares a great deal about how the tables are built.

Work these two problems, showing every step of the arithmetic:

  1. What is the upland region's opportunity cost of one crate of pottery, in sacks of grain?
  2. How much duty is owed at the border on the furniture shop's chairs, in dollars?

Beside each answer, add a brief interpretation:

  • Problem 1: say which region has the absolute advantage in each good and why; find the lowland region's opportunity cost of one crate of pottery and each region's opportunity cost of one sack of grain; assign the comparative advantage in pottery and in grain to the lower opportunity cost; then name one swap rate, in sacks of grain per crate, that would leave both regions better off, and explain why it works.
  • Problem 2: say who owes the duty at the border and why; give two readings of who might bear the cost afterward, and label that question as open rather than settled; then choose the shop's first rung on the entry ladder for its tables, justify it from the case using risk and control, and explain why one other rung fits the case less well.

Explain it to a non-expert

A relative who runs a small farm asks you, "If the upland region is better at making both grain and pottery, why would it ever buy grain from the lowland region?" Write a 3–5 sentence message that explains comparative advantage in everyday words, answers the question from the case, and names one limit, including that the regions are illustrative and that nothing here is trade, tax, or legal advice for a real business. Explain any technical term in everyday words. More than one good answer is possible.

For a different, ungraded example, imagine a neighbor who reads that the country ran a trade deficit and asks whether the country now owes that money to someone. Model answer: "A trade deficit means that over the year, people and businesses here bought more from other countries than they sold to them. It is a measure of a year's buying and selling, not a loan that has to be paid back. Think of a month when you spent more at stores than you earned from a side job: you may have used savings, not borrowed. One limit: the figure alone doesn't tell you whether the economy is healthy. This is general information about how trade is measured, not advice about anyone's money."

Use that pattern for your relative, with your own wording and evidence.

Use what the whole course taught you

This is the last assignment of the course, so Problem 2 asks you to choose among methods you already know. When you pick the shop's first rung, you may also name one earlier tool, such as a SWOT, a break-even, or a stakeholder map, that you would use to test the choice before the shop commits, and say why that tool fits this decision better than another one. That reasoning counts toward Problem 2's interpretation, not as extra work.

After this assignment, Week 16 holds the cumulative final. Its study guide, the Final Practice Exam, and the exam-prep tutorial in that week help you prepare; the skill you practise here, choosing the right tool for a case and saying why another fits less well, is the same move the final asks you to make across every week.

Show your work. A reader should be able to rebuild every figure you report from the case without guessing which numbers you used.

Deliverables

Submit a single report containing:

  • the two answers, each with every step of the arithmetic shown and the interpretation the task names for that problem;
  • your message to your relative, explaining comparative advantage in everyday words, answering the question from the case, and naming one limit; and
  • a short list of the case's figures, giving each region's opportunity cost of a crate of pottery and of a sack of grain, the swap rate you chose, and the duty owed, so your amounts can be checked.

Keep it to roughly one page. Clear and correct beats long.

Choose how you show it. Present your report as written text, or as a recorded audio or video explanation of about three minutes with a transcript, or as a labelled sketch of the two regions' output and the entry ladder with a short note. Every form is graded by the same scoring criteria. Submit in any accessible file type or as a link; a recorded response may be submitted as audio or video with a transcript, or as text.

How you'll be graded

The full analytic rubric is attached to this assignment in Canvas.

Academic integrity and AI use

This version is designed to be completed without AI: do the arithmetic, the interpretations, and the writing yourself, without a chatbot or other AI tool. You may use a free spreadsheet to lay out the regions' figures. Submitting AI-generated work as your own, or copying another student's work, is an integrity violation under the course policy.

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