Chapter Five. International Trade Theory
|
|
- Chastity Brooks
- 6 years ago
- Views:
Transcription
1
2 Chapter Five International Trade Theory
3 Overview of Trade Theory 5-3 Free Trade occurs when a government does not attempt to influence, through quotas or duties, what its citizens can buy from another country or what they can produce and sell to another country The Benefits of Trade allow a country to specialize in the manufacture and export of products that can be produced most efficiently in that country
4 Trade Theory-Overview 5-4 The Pattern of International Trade displays patterns that are easy to understand (Saudi Arabia/oil or China/crawfish). - Others are not so easy to understand (Japan and cars) The history of Trade Theory and government involvement presents a mixed case for the role of government in promoting exports and limiting imports Later theories appear to make a case for limited involvement
5 Mercantilism: Mid-16th Century 5-5 A nation s wealth depends on accumulated treasure - Gold and silver are the currency of trade Theory says you should have a trade surplus - Maximize export through subsidies - Minimize imports through tariffs and quotas Flaw: zero-sum game
6 Mercantilism-Zero-Sum Game 5-6 In 1752, David Hume pointed out that: - Increased exports lead to inflation and higher prices - Increased imports lead to lower prices Result: Country A sells less because of high prices and Country B sells more because of lower prices In the long run, no one can keep a trade surplus
7 Theory of Absolute Advantage 5-7 Adam Smith argued (Wealth of Nations, 1776): Capability of one country to produce more of a product with the same amount of input than another country can vary - A country should produce only goods where it is most efficient, and trade for those goods where it is not efficient Trade between countries is, therefore, beneficial Assumes there is an absolute balance among nations - Example: Ghana/cocoa
8 Theory of Absolute Advantage 5-8
9 Absolute Advantage and the Gains From Trade 5-9
10 Theory of Comparative Advantage 5-10 David Ricardo (Principles of Political Economy, 1817): - Extends free trade argument - Efficiency of resource utilization leads to more productivity - Should import even if country is more efficient in the product s production than country from which it is buying - Look to see how much more efficient If only comparatively efficient, than import Makes better use of resources Trade is a positive-sum game
11 5-11 Theory of Comparative Advantage
12 Comparative Advantage and the Gains From Trade 5-12
13 Simple Extensions of the Ricardian Model 5-13 Immobile resources: - Resources do not always move easily from one economic activity to another Diminishing returns: - Diminishing returns to specialization suggests that after some point, the more units of a good the country produces, the greater the additional resources required to produce an additional item - Different goods use resources in different proportions
14 Simple Extensions of the Ricardian Model 5-14 Free trade (open economies): - Free trade might increase a country s stock of resources (as labor and capital arrives from abroad) - Increase the efficiency of resource utilization
15 PPF Under Diminishing Returns 5-15
16 Influence of Free Trade on PPF 5-16
17 Heckscher (1919)-Olin (1933) Theory 5-17 Export goods that intensively use factor endowments which are locally abundant - Corollary: import goods made from locally scarce factors Note: Factor endowments can be impacted by government policy - minimum wage Patterns of trade are determined by differences in factor endowments - not productivity Remember, focus on relative advantage, not absolute advantage
18 Product Life-Cycle Theory - R. Vernon (1966) 5-18 As products mature, both location of sales and optimal production changes Affects the direction and flow of imports and exports Globalization and integration of the economy makes this theory less valid
19 Product life cycle theory 5-19 Fig 4.5
20 5-20 New Trade Theory In industries with high fixed costs: - Specialization increases output, and the ability to enhance economies of scale increases - Learning effects are high. These are cost savings that come from learning by doing
21 New Trade Theory-Applications 5-21 Typically, requires industries with high, fixed costs - World demand will support few competitors Competitors may emerge because of First-mover advantage - Economies of scale may preclude new entrants - Role of the government becomes significant Some argue that it generates government intervention and strategic trade policy
22 Theory of National Competitive Advantage 5-22 The theory attempts to analyze the reasons for a nation s success in a particular industry Porter studied 100 industries in 10 nations - Postulated determinants of competitive advantage of a nation were based on four major attributes Factor endowments Demand conditions Related and supporting industries Firm strategy, structure and rivalry
23 5-23 Porter s Diamond Success occurs where these attributes exist More/greater the attribute, the higher chance of success The diamond is mutually reinforcing
24 5-24 Porter s Diamond
25 5-25 Factor Endowments Factor endowments: A nation s position in factors of production such as skilled labor or infrastructure necessary to compete in a given industry - Basic factor endowments - Advanced factor endowments
26 5-26 Basic Factor Endowments Basic factors: Factors present in a country - Natural resources - Climate - Geographic location - Demographics While basic factors can provide an initial advantage they must be supported by advanced factors to maintain success
27 5-27 Advanced Factor Endowments Advanced factors: The result of investment by people, companies, and government are more likely to lead to competitive advantage - If a country has no basic factors, it must invest in advanced factors
28 Advanced Factor Endowments 5-28 Communications Skilled labor Research Technology Education
29 5-29 Demand Conditions Demand: - creates capabilities - creates sophisticated and demanding consumers Demand impacts quality and innovation
30 5-30 Related and Supporting Industries Creates clusters of supporting industries that are internationally competitive Must also meet requirements of other parts of the Diamond
31 5-31 Firm Strategy, Structure and Rivalry Long term corporate vision is a determinant of success Management ideology and structure of the firm can either help or hurt you Presence of domestic rivalry improves a company s competitiveness
32 5-32 Porter s Theory-Predictions Porter s theory should predict the pattern of international trade that we observe in the real world Countries should be exporting products from those industries where all four components of the diamond are favorable, while importing in those areas where the components are not favorable
33 5-33 Implications for Business Location implications: - Disperse production activities to countries where they can be performed most efficiently First-mover implications: - Invest substantial financial resources in building a firstmover, or early-mover advantage Policy implications: - Promoting free trade is in the best interests of the home country, not always in the best interests of the firm, even though many firms promote open markets
34 Looking Ahead to Chapter The Political Economy of International Trade - Instruments of Trade Policy - The Case for Government Intervention - The Revised Case for Free Trade - Development of the World Trading System
International Business 7e
International Business 7e by Charles W.L. Hill (adapted for LIUC09 by R.Helg) McGraw-Hill/Irwin Copyright 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 5 International Trade Theory
More informationInternational business chapter 5 AN OVERVIEW OF TRADE THEORY. The benefits of trade. The pattern of International Trade.
International business chapter 5 AN OVERVIEW OF TRADE THEORY. Free trade: Refers to a situation where a government does not attempt to influence (through quotas or duties) what its citizens can buy from
More informationInternational Business 8e
International Business 8e By Charles W.L. Hill (adapted for LIUC 2010 by R.Helg) Chapter 5 International Trade Theory McGraw-Hill/Irwin Copyright 2011 by the McGraw-Hill Companies, Inc. All rights reserved.
More informationInternational Trade Theory. Topics in Global Markets. Chapter 5. Why is Free Trade beneficial?
Topics in Global Markets Class presentation, chpt 5 International Business, By Charles W.L. Hill (adapted for LIUC2011 by R.Helg) Chapter 5 International Trade Theory. Why is Free Trade beneficial? Free
More informationMGT491 Midterm Notes Ch. 5: International Trade Theory
MGT491 Midterm Notes Ch. 5: International Trade Theory In international trade, there are always winners and losers, but economists argue that the benefits to the winners outweigh the costs borne by the
More informationCHAPTER 5 INTERNATIONAL TRADE
CHAPTER 5 INTERNATIONAL TRADE LEARNING OBJECTIVES: 1. Describe the relation between international trade volume and world output, and identify overall trade patterns. 2. Describe mercantilism, and explain
More informationTheories on International Trade - Mercantilism ( )
International Financial Accounting and Policy International Trade Theory Dinuka Perera ACA, ACMA (UK), CGMA, ACMA (SL), MBA (PIM - Sri J.) Theories on International Trade - Mercantilism (1500-1800) Theory
More informationINTERNATIONAL BUSINESS ENVIRONMENT TOPIC 2
INTERNATIONAL BUSINESS ENVIRONMENT TOPIC 2 International Trade Theories (WHAT ECONOMISTS SAY) Key trade and investment theories Country-based theories Mercantilism Absolute/Comparative advantage Factor
More informationIn this topic, you will explore global patterns of international trade and : Learn about mercantilism the earliest theory of international trade.
1 In this topic, you will explore global patterns of international trade and : Learn about mercantilism the earliest theory of international trade. Address the theories of absolute and comparative advantage.
More informationCHAPTER 2 FOUNDATIONS OF MODERN TRADE THEORY
CHAPTER 2 FOUNDATIONS OF MODERN TRADE THEORY MULTIPLE-CHOICE QUESTIONS 1. The mercantilists would have objected to: a. Export promotion policies initiated by the government b. The use of tariffs or quotas
More informationWhy do Countries Trade? Part II
Why do Countries Trade? Part II AED/IS 4540 International Commerce and the World Economy Professor Sheldon sheldon.1@osu.edu Adam Smith and Absolute Advantage Adam Smith (1776) writing in the Wealth of
More informationComprehensive Exam Review Dr. Chayo Trangadisaikul BP 6910 International Business Management 27/7/2017
Comprehensive Exam Review Dr. Chayo Trangadisaikul BP 6910 International Business Management 27/7/2017 Referencing Textbook (choose one) Hill, C. (2010), International Business: Competing in the Global
More informationCompetitiveness: Demystifying Concepts, with Application to the Agri-food Sector. Anatoliy Oginskyy, Kate Stiefelmeyer, and Al Mussell
Competitiveness: Demystifying Concepts, with Application to the Agri-food Sector Anatoliy Oginskyy, Kate Stiefelmeyer, and Al Mussell November 2011 1. Introduction For the second year in a row Canada s
More informationInternational Trade Theory
International Trade Theory 6 Learning objectives Understand why nations trade with each other. Summarize the different theories explaining trade flows between nations. Recognize why many economists believe
More informationCHAPTER 2 FOUNDATIONS OF MODERN TRADE THEORY: COMPARATIVE ADVANTAGE
CHAPTER 2 FOUNDATIONS OF MODERN TRADE THEORY: COMPARATIVE ADVANTAGE MULTIPLE CHOICE 1. The mercantilists would have objected to: a. Export promotion policies initiated by the government b. The use of tariffs
More information7/29/2017. Learning Objectives. Theories of International Trade and Investment. Mercantilism and Neomercantilism. Comparative Advantage.
Learning Objectives 5.1 Appreciate why nations trade. Theories of International Trade and Investment 5.2 Learn about how nations can enhance their competitive advantage. 5.3 Understand why and how firms
More informationGlobal Business and International Trade. The classical model of international trade, HO theorem and its aftermath
Global Business and International Trade The classical model of international trade, HO theorem and its aftermath Outline of today s lecture Classical theory of international trade Modern theories of international
More informationFile: Ch05; Chapter 5: Factor Endowments and the Heckscher-Ohlin Theory. Multiple Choice
File: Ch05; Chapter 5: Factor Endowments and the Heckscher-Ohlin Theory Multiple Choice 1. The H-O model extends the classical trade model by: a. explaining the basis for comparative advantage b. examining
More informationInternational Economics dr Wioletta Nowak. Lecture 3-4
International Economics dr Wioletta Nowak Lecture 3-4 Trade with Economies of Scale Intra-Industry Trade Theory of Overlapping Demands (Linder, 1961) Product Life Cycle Theory (Vernon, 1966) Gravity Model
More informationEcon 340. Outline. Lecture 4 Modern Theories and Additional Effects of Trade. Sources of Comparative Advantage. Sources of Comparative Advantage
Outline Econ 340 Lecture 4 Modern Theories and Additional The ew ew Trade Theory Lecture 4: Modern Theories 2 Sources of Comparative Advantage What determines comparative advantage? Answer: Many things
More informationINTERDEPENDENCE AND THE GAINS FROM TRADE
3 INTERDEPENDENCE AND THE GAINS FROM TRADE LEARNING OBJECTIVES: By the end of this chapter, students should understand: how everyone can benefit when people trade with one another. the meaning of absolute
More informationChapter 5 International trade
Chapter 5 International trade International trade consists of buying and selling of exports and imports between countries. Why do we trade? The reason countries do not produce all their own goods to satisfy
More informationEC2004: International Trade Revision Topics.
1. Basic concepts: absolute advantage; EC2004: International Trade Revision Topics. comparative advantage (CA); opportunity cost (OC); economies of scale (EOS); factor intensity; factor abundance. 2. Basic
More informationStudy Questions. Lecture 4 Modern Theories and Additional Effects of Trade
Study Questions Page 1 of 6 Study Questions Lecture 4 and Additional Effects of Trade Part 1: Multiple Choice Select the best answer of those given. 1. Which of the following is not a possible cause of
More informationInternational Trade. Notes: trade theory. introduction
International Trade trade theory introduction Size of the trade sector varies among nations. Some nations trade a great deal of their GDP to other countries. Other nations trade a relatively small fraction
More informationIntermediate Macroeconomics
Intermediate Macroeconomics ECON 3312 Lecture 2 William J. Crowder Ph.D. Mercantilism Economic Nationalism Beggar-thy-neighbor policies Bullionism Regulate everything! Trade restrictions Monopoly rights
More information1. The Heckscher Olin model emphasizes as the source of comparative advantage.
Study Questions for Week 3 1. The Heckscher Olin model emphasizes as the source of comparative advantage. 2. Examine table 3.2. According to the data in this table, who would have a comparative advantage
More informationComparative Advantage and Benefits of Trade
Supporting Teachers: Inspiring Students Economics Revision Focus: 2004 A2 Economics Comparative Advantage and Benefits of tutor2u (www.tutor2u.net) is the leading free online resource for Economics, Business
More informationDal vantaggio comparato al vantaggio competitivo
Dal vantaggio comparato al vantaggio competitivo Introduction Competitiveness is a highly utilized term for defining the economic status of a country: thousand of time in the last 8 years we have read
More informationInternational Journal of Advancements in Research & Technology, Volume 6, Issue 10, October ISSN
International Journal of Advancements in Research & Technology, Volume 6, Issue 10, October-2017 1 The Competitive Advantage of Nations Competitiveness By Engr. Salim Javed, INU Peshawar Companies achieved
More informationChapter 5: International Trade and Investment
Chapter 5: International Trade and Investment Week 6 Day 1 KEEP YOUR HOMEWORK ASSIGNMENT WITH YOU Discussion Continued A Pipeline of Good Intentions A Pipeline of Good Intentions One representative from
More informationInterdependence and the Gains from Trade
C H A P T E R 3 Interdependence and the Gains from Trade Goals In this chapter you will Consider how everyone can benefi t when people trade with one another Learn the meaning of absolute advantage and
More informationMicroeconomics. Use the Following Graph to Answer Question 3
More Tutorial at www.dumblittledoctor.com Microeconomics 1. To an economist, a good is scarce when: *a. the amount of the good available is less than the amount that people want when the good's price equals
More informationHow Do People and Nations Gain from Specialization and Trade? (EA)
How Do People and Nations Gain from Specialization and Trade? (EA) Remember Alexander Selkirk? He was the castaway who inspired the story of Robinson Crusoe when he was stranded on a desert island in the
More informationInterdependence and the Gains from Trade Download Materiale online
3 Interdependence and the Gains from Trade Download www.octavianjula.ro Materiale online Consider your typical day: You wake up to an alarm clock made in Korea. You pour yourself orange juice made from
More informationCURRICULUM COURSE OUTLINE
CURRICULUM COURSE OUTLINE Course Name(s): Grade(s): 11-12 Department: Course Length: Pre-requisite: Microeconomics Social Studies 1 Semester Teacher Approved Textbook/Key Resource: McConnell and Brue Microeconomics
More informationEconomics DESCRIPTION. EXAM INFORMATION Items
EXAM INFORMATION Items 58 Points 60 Prerequisites NONE Course Length ONE SEMESTER DESCRIPTION This course focuses on the study of economic problems and the methods by which societies solve them. Characteristics
More informationEconomics DESCRIPTION. EXAM INFORMATION Items
EXAM INFORMATION Items 58 Points 60 Prerequisites NONE Grade Level 10-12 Course Length ONE SEMESTER DESCRIPTION This course focuses on the study of economic problems and the methods by which societies
More informationIntroduction. What is country international competitiveness? Introduction 26/10/2016
What is country international competitiveness? Rodolfo Helg, 2016 Introduction Competitiveness is a highly utilized term for defining the economic status of a country: thousand of time in the last 10 years
More information4800/4810. INTERNATIONAL STRATEGY: Creating Value in Global Markets 4/3/2014. The Global Economy: A Brief Overview
4800/4810 INTERNATIONAL STRATEGY: Creating Value in Global Markets The Global Economy: A Brief Overview Opportunities and risks when firms diversify abroad Trade across nations will exceed trade within
More informationEconomics 101 Spring 2014 International Trade. Problem Set 3. May 20, Horizontal Foreign Direct Investment
Economics 101 Spring 2014 International Trade Problem Set 3 May 20, 2014 Due: Instructor: E-mail: Thu, June 5, before 8:00am Marc-Andreas Muendler muendler@ucsd.edu 1 Horizontal Foreign Direct Investment
More informationInterdependence and the Gains from Trade
Chapter 3 Interdependence and the Gains from Trade Consider your typical day: You wake up to an alarm clock made in Korea. You pour yourself orange juice made from Florida oranges and coffee from beans
More information1. If the per unit cost of production falls, then... A.) the supply curve shifts right (or down)
1. If the per unit cost of production falls, then... A.) the supply curve shifts right (or down) B.) there is a downward movement along the existing supply curve which does not shift C.) the supply curve
More informationTest A. Interdependence and the Gains from Trade. Chapter 3
Chapter 3 Interdependence and the Gains from Trade Test A 1. A country s consumption possibilities frontier can be outside its production possibilities frontier a. with trade. b. by allocating resources
More informationBUSA INTERNATIONAL STRATEGY: Creating Value in Global Markets
BUSA 4800 INTERNATIONAL STRATEGY: Creating Value in Global Markets The Global Economy: A Brief Overview Opportunities and risks when firms diversify abroad Trade across nations will exceed trade within
More informationCompetitiveness and the Sustainability of South African Agriculture
Competitiveness and the Sustainability of South African Agriculture by Dr. Herman van Schalkwyk FERTASA 57TH ANNUAL CONGRESS 2017 3 & 4 MAY 2017 Protea Hotel Edward, Durban, KwaZulu Natal Contents Introduction
More informationPreface... iii Introduction... xxi Chapter 1: Managerial Economics: Meaning, Nature, Scope, and Importance... 1
Table of Contents Preface... iii Introduction... xxi Chapter 1: Managerial Economics: Meaning, Nature, Scope, and Importance... 1 1.1 Introduction... 2 1.2 Meaning of Economics... 2 1.2.1 Nature of Economics...
More informationSCHOOL DISTRICT OF THE CHATHAMS CURRICULUM
CONTENT AREA(S): Social Studies COURSE/GRADE LEVEL(S): AP Economics/ 10th - 12th Grade I. Course Overview Advanced Placement Economics provides students with a thorough understanding of the principles
More informationCHAPTER THREE. «Chapter three studies the theoretical discussion. In
CHAPTER THREE «Chapter three studies the theoretical discussion. In addition to, this chapter introduces the measurement methods of globalization, F-test and T-test briefly» 49 3- Introduction: The basic
More informationAbsolute Advantage Adam Smith
AmarKJR Nayak/XIMB Absolute Advantage Adam Smith Assuming that Labor is the only scarce factor for production, countries can increase their well being by producing only those goods that they are able to
More informationMicroeconomics
Microeconomics 978-1-63545-005-7 To learn more about all our offerings Visit Knewtonalta.com Source Author(s) (Text or Video) Title(s) Link (where applicable) OpenStax Steve Greenlaw - University of Mary
More informationCapacity Building Workshop on Primary Data Collection and Competitiveness Analysis
ARTNeT Greater Mekong Sub-region (GMS) initiative Capacity Building Workshop on Primary Data Collection and Competitiveness Analysis organized in collaboration with the Faculty of Economics and Business
More informationChapter 5 Resources and Trade: The Heckscher-Ohlin Model
Chapter 5 Resources and Trade: The Heckscher-Ohlin Model Introduction In addition to differences in labor productivity, trade occurs due to differences in resources across countries. The Heckscher-Ohlin
More informationECONOMICS Levels: Units of Credit:.5 CIP Code: Prerequisite: None
Economics 1 EONOMIS Levels: 10-12 Units of redit:.5 IP ode: 52.0611 Prerequisite: None OURSE DESRIPTION ORE S, OBJETIVES, AND INDIATORS 52.0611-01 Students will understand the economic condition of scarcity
More informationA Correlation of. To the Mississippi College- and Career- Readiness Standards Social Studies
A Correlation of To the 2018 Mississippi College- and Career- Readiness Standards Social Studies Table of Contents E.1... 3 E.2... 6 E.3... 7 E.4... 11 E.5... 15 E.6... 19 E.7... 24 E.8... 26 E.9... 28
More informationTOTAL EXAM REVISION. Total Exam Revision BSB119 (Global Business) Abstract. BSB119 Global Business
Total Exam Revision BSB119 (Global Business) Abstract This is total exam revision for BSB119 Focus is mostly on lectures 5, 6, 7, 9 & 10 BSB119 Global Business CONTENTS 1 Lecture 1 Globalisation & production...
More informationEconomics UNIT 1: THE GAME OF ECONOMICS. Core
Core offers a tightly focused and scaffolded curriculum that provides an introduction to key economic principles. The course covers fundamental properties of economics, including an examination of markets
More informationMacroeonomics. Ten Principles of Economics. In this chapter, look for the answers to these questions: What Economics Is All About. N.
C H A P T E R 1 In this chapter, look for the answers to these questions: Ten Principles of Economics P R I N C I P L E S O F Macroeonomics N. Gregory Mankiw Premium PowerPoint Slides by Ron Cronovich
More informationPractice Test for Final
Name: Class: Date: Practice Test for Final True/False Indicate whether the statement is true or false. 1. A public good or service can be consumed by paying and nonpaying customers alike. 2. An example
More informationEcon 366. Fall 2012 Energy Prices, Energy Booms, and the Macro Economy
Econ 366 Fall 2012 Energy Prices, Energy Booms, and the Macro Economy Energy Prices: Oil Energy Prices: Natural Gas Energy Prices: Coal Energy Price Trends From the preceding slides, we see that there
More informationPreview. Introduction. Chapter 5. Resources and Trade: The Heckscher-Ohlin Model
Chapter 5 Resources and Trade: The Heckscher-Ohlin Model Preview Production possibilities Changing the mix of inputs Relationships among factor prices and goods prices, and resources and output Trade in
More informationTen Principles of Economics
Wojciech Gerson (1831-1901) Seventh Edition Principles of Economics N. Gregory Mankiw CHAPTER 1 Ten Principles of Economics In this chapter, look for the answers to these questions What kinds of questions
More informationFinal Exam - Answers
Page 1 of 8 December 20, 2000 Answer all questions. Write your answers in a blue book. Be sure to look ahead and budget your time. Don t waste time on parts of questions that you can t answer. Leave space
More informationBA5101 ECONOMIC ANALYSIS FOR BUSINESS MBA/IYear/ I Semester 2 Marks Questions & Answers
BA5101 ECONOMIC ANALYSIS FOR BUSINESS MBA/IYear/ I Semester 2 Marks Questions & Answers 1. Define consumer behavior Consumer behavior is the study of when, why, how, and where people do or do not buy a
More informationTen Principles of Economics
Wojciech Gerson (1831-1901) Seventh Edition Principles of Macroeconomics N. Gregory Mankiw The principles of HOW PEOPLE MAKE DECISIONS CHAPTER 1 Ten Principles of Economics lithian/shutterstock.com In
More informationThe Economic Problem: Scarcity and Choice
Chapter 2 The Economic Problem: Prepared by: Fernando & Yvonn Quijano 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair The Economic Problem: 2 Chapter Outline Scarcity,
More informationTotal Test Questions: 80 Levels: Grades Units of Credit:.50
DESCRIPTION This course focuses on the study of economic problems and the methods by which societies solve them. Characteristics of the market economy of the United States and its function in the world
More information12) What determines the distribution of goods and services in a market economy?
The Principles of Economics: EOCT Review 1) What is scarcity? How is scarcity different from shortages? 2) What are the three factors of production: 3) Define "labor" and give an example: 4) Define "land"
More informationContents. Chapter 1 Strategic Marketing Management An Introduction Chapter 2 Marketing Strategy and Planning 26-52
Contents Part I- Introduction to Strategic Marketing Chapter 1 Strategic Marketing Management An Introduction 3-25 Chapter 2 Marketing Strategy and Planning 26-52 Chapter 3 Business Strategy and Competitive
More informationCHAPTER 2 Trade-offs, Comparative Advantage, and the Market System
CHAPTER 2 Trade-offs, Comparative Advantage, and the Market System SOLUTIONS TO END-OF-CHAPTER EXERCISES Review Questions 2.1 Production Possibilities Frontiers and Opportunity Costs (pages 30 36) Learning
More informationInterdependence and Trade. Interdependence and the Gains from Trade. Interdependence and Trade. Interdependence and Trade.
Interdependence and Trade Interdependence and the Gains from Trade Chapter 3 All rights reserved. Copyright 001 by Harcourt, Inc. Requests for permission to make copies of any part of the work should be
More informationChapter 5 Resources and Trade: The Heckscher-Ohlin Model
Chapter 5 Resources and Trade: The Heckscher-Ohlin Model Preview Production possibilities Changing the mix of inputs Relationships among factor prices and goods prices, and resources and output Trade in
More informationEconomics 452 International Trade Theory and Policy Fall A Japanese firm is deciding how to serve the U.S. market for SUVs.
Name FINAL EXAM Economics 452 International Trade Theory and Policy Fall 2010 FOREIGN DIRECT INVESTMENT 1-4 A Japanese firm is deciding how to serve the U.S. market for SUVs. 1. Desire to avoid tariffs
More informationPROGRAM OF ENTERING EXAMINATION
PROGRAM OF ENTERING EXAMINATION for foreign citizens entering to the basic educational master s program «International trade system» (in English) according to assignment of formation 38.04.01 «ECONOMY»
More informationDEPARTMENT OF ECONOMICS PROGRAMME SPECIFIC OUTCOME
DEPARTMENT OF ECONOMICS PROGRAMME SPECIFIC OUTCOME 1. Identify the role of supply and demand. 2. Identify the necessary conditions for market economies to functions well. 3. Discuss the advantages of market
More informationINTERNATIONAL BUSINESS and GLOBALIZATION
INTERNATIONAL BUSINESS and GLOBALIZATION Dr. Bett Mickels WorldWideTeams Consulting Hsiuping University of Science and Technology International Business and Globalization Agenda Globalization characteristics
More informationNeoclassical Political Economics
Neoclassical Political Economics 1 Neoclassical economics refers to a general approach (a metatheory ) to economics based on supply and demand which depends on individuals (or any economic agent) operating
More informationCurriculum Standard One: The students will understand common economic terms and concepts and economic reasoning.
Curriculum Standard One: The students will understand common economic terms and concepts and economic reasoning. *1. The students will examine the causal relationship between scarcity and the need for
More informationBusiness. Management 113. Complete
Business Management 113 Complete 1 CHAPTER 1:Business Environment BUSINESS: A DEFINITION BUSINESS: The organised effort of individuals to produce and sell, for a profit, the goods and services that satisfy
More informationChapter 1. Preliminaries. Introduction. What is math? History? Music? What is ECONOMICS? What is MICROECONOMICS? Chapter 1 2
Chapter 1 Preliminaries Introduction What is math? History? Music? What is ECONOMICS? What is MICROECONOMICS? Chapter 1 2 Themes of Microeconomics Microeconomics deals with ( ) Limited budgets Limited
More informationFinal Examination Semester 3 / Year 2012
Final Examination Semester 3 / Year 2012 COURSE : INTERNATIONAL BUSINESS COURSE CODE : IBUS 2003 TIME : 2 1/2 HOURS DEPARTMENT : MANAGEMENT LECTURER : HO SOK CHING Student s ID : Batch No : Notes to candidates:
More informationThe process that involves the study of similarities and differences among consumers in two or more nations or societies is called:
1 The process that involves the study of similarities and differences among consumers in two or more nations or societies is called: 2 3 4 5 cross-cultural analysis. Correct cross-cultural analysis. The
More informationWhat affects our business from the outside? External Environmental Analysis. The External Environment
Chapter 2 The External : Opportunities, Threats, and Industry Competition, and Competitor Analysis What affects our business from the outside? 1 External al Analysis A continuous process which includes
More informationWHAT IS ECONOMICS? Understanding Economics Chapter 1
WHAT IS ECONOMICS? Understanding Economics Chapter 1 Chapter 1, Lesson 1 Scarcity and the Science of Economics Needs vs. Wants! Need a basic requirement for survival, such as food, clothing and shelter.!
More informationChapter 2 The Economic Problem: Scarcity, and Choice Principles of Macroeconomics, Case/Fair, 8e
Chapter 2 The Economic Problem: Scarcity, and Choice Principles of Macroeconomics, Case/Fair, 8e 2.1 Scarcity, Choice, and Opportunity Cost Multiple Choice 1) The process by which resources are transformed
More informationWhy Nations Trade. It is exchange of goods and services in the world market ( global market ).
Why Nations Trade 1. What are the various markets in which the sale of goods and services takes place? They are local, regional, and national markets. 2. What is international trade? It is exchange of
More informationA Planned Course Statement for. Economics, AP. Length of Period (mins.) 41 Total Clock Hours: 123. Periods per Cycle: 6 Length of Course (yrs.) 1.
East Penn School District Secondary Curriculum A Planned Course Statement for Economics, AP Course # 266 Grade(s) 12 Department: Social Studies Length of Period (mins.) 41 Total Clock Hours: 123 Periods
More informationGlobal. Business. Today
Global Business Today Charles W. L. Hill University of Washington G. Tomas M. Hult Michigan State University THE PROVEN CHOICE FOR INTERNATIONAL BUSINESS xiii Closing Case: Who Makes the Apple iphone?
More informationTen Principles of Economics
Seventh Edition Principles of Economics N. Gregory Mankiw CHAPTER 1 Ten Principles of Economics In this chapter, look for the answers to these questions What kinds of questions does economics address?
More informationExploring the World of Business and Economics
Chapter 1 Exploring the World of Business and Economics 1 Discuss what you must do to be successful in the world of business. 2 Define business and identify potential risks and rewards. 3 Define economics
More informationChapter Two Country Selection and Entry Strategies. Copyright 2012, SAGE Publications, Inc.
Chapter Two Country Selection and Entry Strategies Learning Objectives 1. What two factors drive market economies, and how are these factors different in command economies? 2. How do Rostow s five stages
More informationUK Economy and Globalisation Revision Notes if you do one thing..
Trade Benefits All? UK Economy and Globalisation Revision Notes if you do one thing.. This unit is about globalisation and international trade there are both benefits and drawbacks of international trade:
More informationPractice exam for midterm 1, summer Chapters 1-7
Practice exam for midterm 1, summer 2015. Chapters 1-7 To answer the next 4 questions, suppose there is a small island economy with 20 Hawkeyes and 30 Buckeyes. Each Hawkeye is capable of producing either
More informationTen Principles of Economics
C H A P T E R 1 Ten Principles of Economics Economics P R I N C I P L E S O F N. Gregory Mankiw Premium PowerPoint Slides by Ron Cronovich 2009 South-Western, a part of Cengage Learning, all rights reserved
More informationAPPLIED ECON. FOR MANAGERS SESSION 2
APPLIED ECON. FOR MANAGERS SESSION 2 I. REVIEW A. ECONOMICS AS THE STUDY OF RATIONAL CHOICE NECESSITATED BY THE FACT OF SCARCITY B. SOCIETY S THREE BIG CHOICES 1. WHAT TO PRODUCE? 2. HOW TO PRODUCE IT?
More informationFrom Clusters to Regions Global Best Practices Economic Developers Council of Ontario 2017 Conference
The Ministry of Economic Development and Growth From Clusters to Regions Global Best Practices Economic Developers Council of Ontario 2017 Conference February 2017 Company success and location In many
More informationAbsolute and Comparative
Absolute and Comparative Advantage By: OpenStaxCollege The American statesman Benjamin Franklin (1706 1790) once wrote: No nation was ever ruined by trade. Many economists would express their attitudes
More information1. Lowering the costs is one of the objectives of the production and logistics function
Chapter 17 Global Production, Outsourcing, and Logistics True / False Questions 1. Lowering the costs is one of the objectives of the production and logistics function of an international firm. True False
More informationMidterm I (100 Points) AGEC 5343 Posted: Tuesday, Due Date: Wednesday, 11:00 PM, September 23, 2009
Midterm I (100 Points) AGEC 5343 Posted: Tuesday, 9-22-09 Due Date: Wednesday, 11:00 PM, September 23, 2009 Your Name Section I: The Theory of Comparative Advantage. Considering Table 1 (for the U.S. and
More information