1. Problem. Assume you run a business which will buy, possibly transport, and sell large quantities of anything that you can make money on. You are looking at lots of newspapers to identify what kind of a deal to make next. In a New York paper you notice a report that sellers are offering wheat delivered aboard ship at Chicago today for $20 a ton. In a German paper you notice a report which translates as that buyers will pay, today, the equivalent of $22 a ton for wheat to be delivered aboard ship in Hamburg a month from now. You know paperwork, insurance, and moving a shipload from Chicago to Hamburg will cost about $1 per ton (for shipload quantities) and will take a little less than a month.

2. So: $20/T in US, $22/T in Germany, transport at $1/T. Should you arrange to buy a shipload of Chicago wheat today, to sell it in Hamburg next month, and to move the shipload from Chicago to Hamburg to finish the deal? [NO DISCUSSION, YET, PLEASE] 1.Yes 2.No 3.Probably not but I don’t see why not.

3. Form groups. Each group should have at least one who said yes, at least one who said no, and at least one who said probably not. Discuss this proposed deal and try to reach a common conclusion. So: $20/T in US, $22/T in Germany, transport at $1/T. Should you arrange to buy a shipload of Chicago wheat today, to sell it in Hamburg next month, and to move the shipload from Chicago to Hamburg to finish the deal?

4. So: $20/T in US, $22/T in Germany, transport at $1/T. Should you arrange to buy a shipload of Chicago wheat, to sell it in Hamburg next month, and to move the shipload from Chicago to Hamburg to finish the deal - what did your group decide? 1.Yes 2.No 3.Probably not but I don’t see why not.

5. When you buy 1 T of wheat in Chicago, how many pounds of wheat do you get? A standard ton of 2000 lb. When you sell 1 T of wheat in Hamburg, how many pounds of wheat do you deliver? A metric ton weighing about 2200 lb. Which city has higher wheat prices? They are about even. How will your deal work out? You will lose approximately $1 per ton, your shipping costs.

6. UNITS ARE IMPORTANT. COMMUNICATING UNITS CAN BE EVEN MORE IMPORTANT.