Assignment: Comparative and Absolute Advantage in International Trade

In this Assignment, you will be assessed on the following outcomes:

GEL-1.1: Demonstrate college-level communication through the composition of original materials in Standard American English.

PC-4.1: Assess the value of multiculturalism and diversity in a global environment.


An effective understanding of economics forms the foundation of every manager’s, entrepreneur’s, bureaucrats, and leader’s ability to analyze business situations and to develop an appropriate response. The globalization of business is a fact of life for all business professionals. One of the most contentious issues in today’s global business world is the issue of closing local manufacturing facilities, laying off those American workers, and re-opening the same manufacturing facility in an Asian, or other third world country.

Look in your own closet at the clothes you have purchased. Pick any 10 items of clothing and look at the labels in those clothes. Where were they manufactured? How many of the 10 items were manufactured here in America? If that same exercise had been done 50 years ago, (approximately the 1970s), all the clothes you owned would have been manufactured in textile mills in the Southeastern United States (Georgia, Alabama, Mississippi, North Carolina, South Carolina, etc.). All those Southeastern textile mills are now closed, and people buy foreign made clothes. If you were able to go further back in time to 150 years ago (1870s), the clothes you owned would have been manufactured in textile mills in the Northeast United States (Maine, New Hampshire, Vermont, Massachusetts, etc.). Yet, by the early to mid-1950s, those Northeastern textile mills were closed and their workers were out of a job. The mills had all relocated to the Southeast during the years following the Civil War.

Many people say that we should ban the import of these foreign made clothes, so that more workers in American clothing textile mills could have jobs. Others say that we should continue to import clothing because imported clothing is relatively less expensive and more people can afford to buy more clothes at these low prices. Still others say that we should put an import tariff (an extra tax that would be paid when we buy these imported clothes), making the price of imported clothing comparable to the price of clothing made in the U.S., and, therefore, encouraging American consumers to buy American-made clothing.


Before answering the following questions, review the Assignment Checklist. Then, in a separate Word document, answer the following questions in a 3–4 page expository research paper:

  1. Considering what you have learned about “comparative advantage” and relative “marginal opportunity costs,” discuss the advantages and disadvantages to all involved parties (American workers, American consumers, foreign workers, and foreign consumers) of continued importation and acceptance of foreign made goods into U.S. markets.
  2. Compare and contrast the advantages and disadvantages of instituting an import tariff, or an outright ban on the importation of certain goods into U.S. markets.
  3. Include in your research American trade agreements such as the NAFTA (North American Free Americas Agreement) and the proposed trade agreements of the FTAA (Free Trade Area of the Americas), TAFTA (Transatlantic Free Trade Area), and the Trans-Pacific Partnership. What are the main pros and cons argued in favor, and against these trade agreements? Why do you think each party feels the way they do about the issues?
  4. In considering the foreign trade issue, discuss the benefits and challenges between Americans and the cultures of the citizens of the various trading partner countries with which these trade agreements are made. Discuss the importance of your ability to understand and accept cultural differences in a global context. What recommendations would you suggest to increase American understanding and acceptance of foreign cultures?

Assignment Checklist:

  • Write your paper in a separate Word document.
  • Unless specified differently by your course instructor, save your Assignment to your computer with the following file naming format: Course number_section number_Last_First_unit number
  • Your title page should, at a minimum, contain the following information: Your Name, Course Number, Section Number, Date, and the Title of your paper
  • Write a 3 – 4 page paper (in addition to the title and reference pages) following APA format with citations to any quoted, or paraphrased sources. Your written research should also be in Standard American English with correct spelling, punctuation, grammar, and style (double spaced, in Times New Roman, 12–point, and in black font).
  • Your paper should provide a clearly established and sustained viewpoint and purpose.
  • Your writing should be well ordered, logical and unified, as well as original and insightful.
  • A separate page at the end of your research paper should contain a list of a minimum of three cited and referenced academically credible references, in proper APA format.
  • Cite and reference your academically credible sources from the Kaplan Online Library and any other academically oriented online sources. Review the APA formats found in the Kaplan Writing Center. To access the Kaplan Writing Center, select this link.
  • Review the Rubric below to ensure all points have been captured in the paper.

Unit 2 Assignment: Comparative and Absolute Advantage in International Trade

International Trade Content (30%) Possible Possible
Points Earned
Discuss how the concepts of Absolute Advantage and Comparative Advantage relate to international trade and discuss the attitudes both in favor of and against the U.S.’s continued encouragement of free trade. 12
Multiculturalism Content (20%)
Develop and discuss your recommendations for how to encourage Americans to have a more accepting attitude toward other cultures and how that acceptance will further economic conditions world-wide. 8
Analysis (30%)
Analysis and critical thinking regarding the international trade 12
Writing (20%)
Grammar, spelling, and paragraph composition. 4
References 4
List all of your references according to APA format and in–text citations. Includes a minimum of three cited and referenced academically credible sources.
LATE Paper Deduction 0
Total Points Earned 40

Criteria to be applied to the Multiculturalism Content (20%) of the paper:

PC-4.1: Assess the value of multiculturalism and diversity in a global environment.
No Progress


Student work demonstrates no understanding or progress towards achievement of this outcome.


Student work demonstrates the ability to identify multiculturalism and diversity issues.


Student work demonstrates the ability to identify multiculturalism and diversity issues, and articulate them in a global context.

3 or 4

Student work demonstrates the ability to identify, articulate, and explain a multiculturalism and diversity issue in a global context.

5 or 6

Student work demonstrates the ability to analyze the benefits of multiculturalism and diversity in a global context.

7 or 8

Student work demonstrates the ability to analyze the benefits and challenges of multiculturalism and diversity in a global context and recommend solutions.

School: Kaplan University



  • 15/02/2017
  • 20
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