Unit 2


Learning Outcomes

  1. Employ economic theory to justify business expansion across borders.


While doing the reading, focus on these two questions:

  1. How would you use specialization to take advantage of differences in productivity?
  2. Why are trade barriers a concern for businesses?
  • Head:

    Head, K. (2007). Elements of multinational strategy. Springer Science & Business Media.

  • Politics of Trade:
    John, J., Wild, W., & Kenneth, L. (2019). International business: The Challenges of Globalization. Pearson Education Limited.

Pro Tips

  • Pay special attention to pages 26 to 29 in Head's reading. You need to make sure you can do the numerical problems, i.e. 1 to 5 on page 28.
  • Here is a companion App to Head's chapter 2. Experiment with different values, and make sure you understand why the result changes.
  • This will be our most technical Unit. Please contact me early if you need help with any of the material.


Test your knowledge of Trade. You can submit the quiz only once. Your quiz will not be submitted until you press the submit button at the end of the quiz.

For convenience, there is a pdf version of the quiz provided in the sidebar on the left of the quiz screen.

To do the quiz, click on the quiz link in the course outline.

Test 2

The test must be submitted on the due date. Not before. Not after. In addition, your assessment must be emailed in html or pdf. Use your student ID to name the file e.g. 123456789.pdf

Make use of the Reading material and Online References provided above.

Follow the link for a pdf version of test 2 course outline.




Partly Competent



-Within time window

-Follows the instructions

-At least one instruction was not followed

-More than one of the basic instructions were not followed



-Uses the concept of opportunity cost, absolute advantage, and comparative advantage to justify the decision

-At least one of the concepts was not applied

-More than one concept was not applied



-All calculations are correct

-At least one error in calculation

-More than one error in calculation

Long Run


-All binding constraints are identified

-Slack constraints are identified as such or not included

-At least one constraint is wrong

-More than one constraint is wrong



-Uses all the appropriate notation and terminology

-Some errors or inconsistency in notation

-Confusing notation