Course: Principles of Microeconomics (ECON 1) · Silver Oak University (fictional sample) · Prof. Kessler
Focus: Comparative Advantage & the Gains from Trade · Objective 1 · SLO A & B

📋 Module Overview Page — "Start Here" (Canvas: Page, published)

Week 2 — Comparative Advantage & the Gains from Trade

Last week you learned that every choice has an opportunity cost. This week, that tool does something remarkable: it explains why both sides of a trade can come out ahead, even when one party is better at everything. The result is called comparative advantage, and it is the foundation of every argument for — and against — free trade.

The big question: How can two countries (or people) both gain from trading, even if one is more productive at everything?

By the end of this week, you can:

• explain the difference between absolute advantage (who produces more) and comparative advantage (who produces at a lower opportunity cost);
• compute opportunity-cost ratios from a two-good, two-producer table;
• identify which producer has comparative advantage in each good;
• find a terms of trade in the mutually beneficial range and show that both parties gain;
• keep the positive gains-from-trade result separate from the normative debate about whether free trade is always a good policy.

Do this, in order:

1. Read & watch — the Week 2 resources (≈40 min). → Readings & Resources page
2. Lecture Tutorial — work through comparative advantage with your AI tutor (≈45 min). Due Sun, Sep 13. → submit the chat share link + summary
3. Practice Exercises — 6 quick reps, ungraded (≈15 min).
4. Quiz 2 — 10 questions, closed to AI (≈20 min). Due Sun, Sep 13.
5. Discussion 2 — "Should countries always trade freely?" Initial post Fri, Sep 11, replies Sun, Sep 13.
6. Assignment 2 — the comparative advantage & gains from trade problem set (100 pts). Due Sun, Sep 13.
7. Workshop 2 — Graph & Model Workshop — two-producer table: compute opportunity costs, identify comparative advantage, find a terms of trade, and show both producers gain (50 pts). Due Sun, Sep 13.

A note before you start: the hardest part of this week is keeping absolute and comparative advantage straight. Absolute advantage is about who makes more. Comparative advantage is about who gives up less. They can point in completely different directions — and only comparative advantage determines who should specialize in what.

📣 Welcome Announcement (Canvas: Announcement; available_from_offset_days = 7 — posts Mon, Sep 7)

Subject: Week 2 — the closest thing economics has to a magic trick 🎩

Hi everyone,

Last week you learned that every choice carries an opportunity cost. This week, that idea does something surprising: it explains how both sides of a trade can come out ahead, even if one party is faster at everything.

The concept is called comparative advantage, and it is at the heart of every serious argument about international trade, specialization, and why people (and countries) don't try to do everything themselves.

Don't miss this week:

• The critical distinction: absolute advantage (raw productivity) vs. comparative advantage (lower opportunity cost). They are NOT the same question.
• How to compute opportunity-cost ratios from a simple table — this is the Week 1 skill applied directly.
• How to pick a terms of trade that makes both parties better off, and why it has to fall inside a specific range.

Start with the Module Overview ("Start Here"), then the readings, then your AI Lecture Tutorial. The tutorial will walk you through the full two-country table step by step — don't skip it.

See you in class,
Prof. Kessler