Week 13 — Trade Report: Who Should Make What, and Who Gains?

Assignment 12 of the term — work four problems with the course's two-country model and national account, explain what each figure means, and tell a cousin what a trade deficit does and does not mean.

This adaptive assignment uses a coaching dialogue to help you turn a first attempt into a clear, checkable report. You remain the author. The coach asks questions, checks the reasoning you show, and waits for you to revise before it produces the required report. In Week 1 you priced choices by their opportunity cost and separated positive from normative statements, and in Week 2 you built GDP with net exports as exports minus imports; this week you use both to explain why countries trade. This week's lecture tutorial, quiz, discussion, and Model Workshop practice the same ideas from other angles; this assignment is where you put them together and explain them.

The task

This report uses the week's illustrative numbers, constructed for this course and not real data: per worker-day, Northland makes 4 wheat or 2 cloth and Southland makes 6 wheat or 2 cloth; each country has 12 worker-days; the terms of trade are 2.5 wheat per cloth; and in the course's illustrative national account, exports are 100 and imports are 150, in billions of dollars.

Work these four problems, showing every step on its own line:

1. In the illustrative two-country model, one worker-day in Southland makes 6 wheat or 2 cloth. What is Southland's opportunity cost of one cloth, in wheat?
2. In the same illustrative model, Northland specializes in cloth and trades 14 cloth to Southland at terms of 2.5 wheat per cloth. How many wheat does Northland receive?
3. In the same illustrative model, Southland puts all 12 of its worker-days on wheat at 6 wheat per worker-day and then pays 35 wheat for the cloth it buys. How many wheat does Southland have left after the trade?
4. In the course's illustrative national account, exports are 100 and imports are 150, in billions of dollars. What is the trade balance (net exports), in billions of dollars?

Beside each figure, add one brief interpretation in plain words. For problem 1, say what the cost means, and which country has the comparative advantage in cloth once you compare it with Northland's cost of 2 wheat. For problem 2, say what the wheat Northland receives means for Northland, and why terms of 2.5 wheat per cloth leave both countries better off. For problem 3, say what Southland's remaining wheat means, and whether both countries end with more of both goods than before trade, when Northland had 32 wheat and 8 cloth and Southland had 36 wheat and 12 cloth. For problem 4, describe the trade balance in one neutral sentence, and explain why subtracting imports when adding up GDP does not erase anything made at home.

Explain it to a non-expert

In an illustrative example, your cousin, who works at a furniture warehouse, hears a radio host say the country "lost 50 billion dollars on trade last year" and that a new tariff would win it back. Write a 3–5 sentence message your cousin could follow: what a trade deficit of 50 billion dollars does and does not mean, why two countries can both gain from trading, and one honest limit, such as the adjustment cost that lands on workers in an industry that shrinks, or the higher prices a tariff brings to every household. Explain any technical term in everyday words. More than one good limit can be defended, and you do not have to take a side on the tariff.

For a different, ungraded example, imagine a neighbor who asks why the local bakery buys its flour from a mill instead of grinding its own wheat. Model message: "The bakery could grind its own flour, but every hour spent grinding is an hour not spent baking, which is what it does best. The mill grinds flour all day and gives up much less to do it. So the bakery buys flour and spends its time on bread, and both businesses end up with more than if each did everything itself. The catch is that the bakery now depends on the mill, so if the mill closes or raises its prices, the bakery has to adjust."

Use that pattern for the trade deficit and the gains from trade, with your own explanation.

Here is one honest note about scope: every number in this assignment is illustrative, so do not add a real trade figure or a real tariff rate from the news. The two countries and the national account are built for this course, which is why this report keys only on the model's numbers.

Part 1 — Student instructions

1. Draft all four figures, the four brief interpretations, and your message for your cousin before opening a chatbot.
2. Open any course-approved chatbot. Copy the entire Coach Prompt box, including its first and last marker lines, and paste it as one message. The coach will ask for your draft and then work one question at a time.
3. Answer in your own words. Show calculations when asked. Use the coach's feedback to revise at least one calculation or explanation, even if your first attempt was right.
4. Continue until the prompt's exit condition is met.
5. Save the chat's share link and copy the final report exactly as the coach gives it.

The chatbot is a coach, not a ghostwriter. It must draw out your reasoning rather than write the report for you.

Coach Prompt

COPY EVERYTHING BELOW THIS LINE
ROLE: You are a careful learning coach. Draw out and challenge MY thinking about international trade: absolute advantage, the opportunity-cost table built one ratio at a time with the good given up on top, comparative advantage as the lower opportunity cost, the terms of trade and the mutually beneficial range, the gains from trade in a before-and-after table, and the trade balance NX = X - IM read neutrally. Do not write my assignment for me and do not invent work I did not show.

ASSIGNMENT: Work through these four problems in order, one at a time. Do not invent, replace, or reorder a problem. Every number is illustrative, constructed for my course, not real data. The data: per worker-day, Northland makes 4 wheat or 2 cloth and Southland makes 6 wheat or 2 cloth; each country has 12 worker-days; the terms of trade are 2.5 wheat per cloth; in the national account, exports are 100 and imports are 150, in billions of dollars.
PROBLEM P1: In the illustrative two-country model, one worker-day in Southland makes 6 wheat or 2 cloth. What is Southland's opportunity cost of one cloth, in wheat?
PROBLEM P2: In the same illustrative model, Northland specializes in cloth and trades 14 cloth to Southland at terms of 2.5 wheat per cloth. How many wheat does Northland receive?
PROBLEM P3: In the same illustrative model, Southland puts all 12 of its worker-days on wheat at 6 wheat per worker-day and then pays 35 wheat for the cloth it buys. How many wheat does Southland have left after the trade?
PROBLEM P4: In the course's illustrative national account, exports are 100 and imports are 150, in billions of dollars. What is the trade balance (net exports), in billions of dollars?
After the four figures, I must briefly interpret each one: for P1, what the cost means and which country has the comparative advantage in cloth compared with Northland's cost of 2 wheat; for P2, what the wheat received means for Northland and why terms of 2.5 wheat per cloth leave both countries better off; for P3, what Southland's remaining wheat means and whether both countries end with more of both goods than before trade (Northland 32 wheat and 8 cloth, Southland 36 wheat and 12 cloth); for P4, a neutral sentence about the trade balance and why subtracting imports does not erase anything made at home. I must then write a 3-5 sentence message for a cousin who heard that the country "lost 50 billion dollars on trade," explaining what a trade deficit does and does not mean, why two countries can both gain from trade, and one honest limit.

SCORING CRITERIA: Score only evidence I supply: correct trade-model computations (40 points), reasoning about comparative advantage and the trade balance (32 points), clarity for a non-expert reader (16 points), and showing work so it can be checked (12 points). For each of P1-P4, give 2, 1, or 0 evidence units per criterion; one unit is worth 5 computation points, 4 reasoning points, 2 clarity points, or 1.5 showing-work points. Sum all four problems within each criterion. Count my message for my cousin only with P4.
COMPUTATION UNITS: A correct opportunity cost, wheat received, wheat remaining, or trade balance = 2; the right values and operation with only an arithmetic slip = 1; a missing figure or the wrong values or operation, such as an inverted ratio, forgetting to subtract the wheat paid, or dropping the minus sign on the trade balance, = 0. Do not penalize an alternative valid method or equivalent notation.
REASONING UNITS: For each problem, an accurate account of what the figure means plus the second required part = 2; exactly one of the two = 1; neither = 0. The second parts: P1, which country has the comparative advantage in cloth and why; P2, why terms of 2.5 wheat per cloth leave both countries better off; P3, whether both countries end with more of both goods than before trade; P4, why subtracting imports does not erase anything made at home, with the message for my cousin. An arithmetic slip alone is not a reasoning error.
CLARITY UNITS: For each problem, labeled evidence understandable to someone new to economics, with technical terms explained = 2; intelligible evidence that needs rereading because of ambiguity or jargon = 1; absent or unintelligible evidence = 0. Include the message for my cousin with P4. Missing reasoning alone does not lower clarity for otherwise clear submitted work.
SHOWING-WORK UNITS: For each problem, checkable values and steps = 2; a relevant but incomplete value or step = 1; a figure alone or no method = 0. A visible method stays checkable despite an arithmetic slip.

Do NOT invent grading rules.

DIALOGUE RULES: Ask exactly one question per message and wait for my reply. Start by asking for my complete first attempt. Build each next question from my exact words. Probe an unsupported claim and ask me to examine its evidence. Keep the conversation focused on questions rather than completed work. Never bring in a real trade figure or a real tariff rate, and never take a side on whether a country ought to use tariffs.

ENGAGEMENT GUARDS: A greeting, copied prompt, yes/no reply, or one-word answer is not a substantive exchange. Do not flatter or accept agreement as evidence. Praise only a concrete move I made. If evidence is missing, say what is missing and ask for it. Require a real revision plus a short reflection on why the revision is better. Do not issue the report early.

EXIT CONDITION: Continue until at least five substantive exchanges have occurred AND I have supplied all four figures and their brief interpretations AND written my message for my cousin AND revised at least one calculation or explanation AND reflected on the revision. Stop only after whichever requirement happens last.

REPORT: After the exit condition is satisfied, output exactly these labelled lines in this order. Replace X with the exact earned score; it may end in .5 and must not be rounded to a whole number. Base every line only on evidence in this chat; write "Not supplied" for missing evidence and never raise the score for polished chatbot prose.
STUDENT'S SCORE: X/100
EVIDENCE FOR THE SCORE: [specific evidence from my calculations and reasoning]
REVISION MADE: [what I changed and why]
STRENGTH: [one earned strength]
NEXT STEP: [one concrete improvement]
Then tell me to submit this report, my revised trade report, and the share link.
COPY EVERYTHING ABOVE THIS LINE

Deliverables

Submit these three items in the assignment entry:

• your revised trade report with all four figures, their brief interpretations, and your message for your cousin — written, or recorded as audio or video with a transcript, or as a labelled before-and-after sketch of the two countries' goods with a short note; every form is graded by the same scoring criteria;
• the coach's five-line report; and
• the conversation share link.

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.

Equivalent route (no AI required)

This route assesses the same Week 13 skills — building an opportunity-cost ratio with the good given up on top, naming the comparative advantage, following a trade at terms inside the mutually beneficial range, checking that both countries gain, and reading a trade balance without calling a deficit a loss — for comparable time and effort, about 60 to 90 minutes, the same as the coached route. Complete the same four problems, the four brief interpretations, and the message for your cousin. Then audit your own first draft against the attached scoring criteria, criterion by criterion, and write a second draft. Add a 150–200 word revision memo that names one calculation or explanation you changed, the evidence that prompted the change, and one question you still have. Submit the revised trade report, your completed criteria checklist, and the revision memo in the assignment entry; together they replace the share link and the coach's report. This route uses the same scoring criteria and the same points, with no penalty for choosing it.

How you'll be graded

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

Academic integrity and AI use

The calculations, reasoning, revision, and final report must be your own. Do not ask the chatbot to create the assignment or add evidence you did not produce, and do not let it supply a real trade figure or tariff rate. Submit an honest share link from your own dialogue. The equivalent route keeps the same workload and evidence and requires no AI account.

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