Purchase Solution

International Trade Relations

Not what you're looking for?

Ask Custom Question

As an international economist you have been asked to prepare a short speech which answers the following questions:

1.How does the Heckscher-Ohlin theory differ from Ricardian theory in explaining international trade patterns?

2.The theory demonstrates how trade affects the distribution of income within trading partners. Explain.

3.How does the Leontief paradox challenge the overall applicability of the factor-endowment model?

4.According to Staffan Linder, there are two explanations of international trade patternsâ?"one for manufacturers and another for primary (agricultural) goods. Explain.

Following that speech, the audience asks you to respond to the following question:

Describe a specific tariff, an ad valorem tariff, and a compound tariff. What are the advantages and disadvantages of each?

Objective:

â?¢Explain the macroeconomic and microeconomic concepts and how they relate to the management of a global organization.

â?¢Critically analyze and evaluate real-life economic problems and opportunities by applying economic concepts, principles, and theory.

â?¢Examine the functions, opportunities, and challenges of the international monetary system.

â?¢Use effective communication techniques.

Purchase this Solution

Solution Summary

International Trade Relations is discussed very comprehensively in this explanation..

Solution Preview

As an international economist you have been asked to prepare a short speech which answers the following questions:

1.How does the Heckscher-Ohlin theory differ from Ricardian theory in explaining international trade patterns?
The Heckscher-Ohlin theory predicts outline of commerce and productions based on the factor endowments of a trading region. According to the Heckscher-Ohlin theory, countries will export products that use their abundant and cheap factors of production and import products that use the countries scarce factors. The Ricardian theory concentrates on comparative advantage. That means a country will specialize in making what they produce the best. The Ricardian theory predicts that countries will specialize instead of producing a broad array of goods. The Ricardian theory does not concentrate on relative amounts of labor and capital within the country. The Ricardian theory instead assumes technological differences among countries.

An important difference between the Heckscher-Ohlin and the Ricardian model is that the Ricardian model assumes one factor of production namely labor but the Heckscher-Ohlin model assumes two factors of production namely capital and labor. However, the Heckscher-Ohlin assumes that capital cannot move from one country to another. However, the Ricardian theory captures the mobility of capital. further, the Ricardian theory is now extended in general form that not only includes labor as a factor of production but also inputs of materials and intermediate goods.

2.The theory ...

Solution provided by:
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
Recent Feedback
  • "I read your comments, and thank you for this feedback. Do I need to find other studies that applied this methodology Ive used? That's where I'm stuck at."
  • "Thank you kindly sir. "
  • "Excellent and well explained. --Thank you kindly. "
  • "Awesome notes. I appreciate you."
  • "I have the follow-up project and I will assign that to you very soon. "
Purchase this Solution


Free BrainMass Quizzes
Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.