1. Summarize the evidence, identifying major patterns and tendencies in student performance.
Students were very engaged in the trade experiment and identified the main ideas of the lesson.
2. Describe major findings and conclusions about what, how and why students met or did not meet learning goals.
The trade experiment was a great success. Students got involved and understood the gains from trade as well as the costs to subsidies and taxes. Students realized that they could trade just the subsidized goods, and make a profit while generating no real gains to trade. Furthermore, one student recognized that everyone pays for subsidies. What the students did not get, however, from the experiment were the losses associated with free trade.
Students were more likely to participate in the experiment and in the case studies. However, during the case study, only a few students made comments to the entire class. In other words, the case studies were not conducted in a manner that got the entire class involved. Each group seemed to have a “leader” who would initiate dialogue and free riding occurred in larger groups.
As the instructor “roamed” about the room, students were more likely to focus.
3. Based on your analysis how will you change the lesson?
Experiment
The instructors ad hoc promptings during the trade experiment were good, but need to be formalized so that they can be reproduced.
The order of the trades should be changed: do most restrictive first, free trade last so trading options are not exhausted. When they heard what others offered as a price, it influenced their answers. It would be interesting to not only query students who traded about the value of their post-trade basket but also students who chose not to trade.
Publicly recording values influences the outcome. Students might not feel comfortable or are less honest about the value of their basket.
There was too much lecturing during the experiment. For example, after the first round of trade there was a brief lecture on why there was no increase in value for some, etc. Students seemed confused and that was a big leap in the lesson. Limit lecturing and have students see what lessons they learned in the end. Between the lecturing and the students copying each other, we could conclude that the students weren’t figuring out things for themselves.
Case Studies
During the case studies, the groups of students need to be smaller (4 students maximum) in order to encourage more participation by more students.
The reading was too difficult and should have been performed outside of class in order to not waste time in class. There needs to be a reading assignment prior to the case study day that holds the students accountable for the readings. Additionally, on the case day, there should be some sort of questions or assignments to keep students accountable for the material for the day.
The Wal-Mart case generated the most discussion.
Pre and Post-Test
Exhibit 5: Potatoes and wheat output (tons per day)
Country Potatoes Wheat
United States 4 2
Ireland 3 1
1. In Exhibit 5, the United States has an absolute advantage in producing:
a. potatoes.
b. wheat.
c. both wheat and potatoes.
d. neither wheat nor potatoes.
2. In Exhibit 5, the opportunity cost of wheat is:
a. 1/2 ton of potatoes in the United States and 1/3 ton of potatoes in Ireland.
b. 2 tons of potatoes in the United States and 3 tons of potatoes in Ireland.
c. 2 tons of potatoes in the United States and 1 ton of potatoes in Ireland.
d. 4 tons of potatoes in the United States and 3 tons of potatoes in Ireland.
3. If the countries in Exhibit 5 follow the principle of comparative advantage, the United States should
a. buy all of its potatoes from Ireland.
b. buy all of its wheat from Ireland.
c. buy all of its potatoes and wheat from Ireland.
d. produce both potatoes and wheat and not trade with Ireland.
4. What terms of trade would be beneficial to both countries in Exhibit 5?
a. 1 ton of wheat trades for 3 tons of potatoes.
b. 1 ton of wheat trades for 2 tons of potatoes.
c. 1 ton of wheat trades for 1½ tons of potatoes.
d. 1 ton of wheat trades for 2⅓ tons of potatoes.
5. Which of the following is true when countries specialize according to their comparative advantage, and then trade?
a. It is possible to increase world output of all goods traded.
b. No one will be harmed by international trade.
c. One country is likely to gain from trade, while others will lose.
d. It is possible to increase output of all products in each county.
6. When economists illustrate gains from specialization and trade using a production possibilities model, what assumptions are made?
a. Opportunity costs are different between producers.
b. All land, labor and capital is fully employed when producers specialize and trade.
c. Producers are able to negotiate terms of trade that are beneficial to both.
d. All of the above
e. Only a. and c. are correct.
Contact: Lisa Giddings
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