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Comparative Advantage

China has a comparative advantage

Answer questions based on the following excerpt from a speech given by Pascal Lamy, Director-General of the World Trade Organization, on Sept. 6, 2006 "China has fundamental interest in an ambitious outcome itn these negotiations. Givenits relative openness, it has an offensive interest in ensuring a decrease of tariffs for m

Use of Ricardian Model, Specific Factors Model, Heckscher-Ohlin-Samuelson Model, Stolper Samuelson Theorem, Standard Trade Model, and Imperfect Competition Model to determine tariff opposition by different groups.

1. You are an advisor to the government of Argentina. Argentina is considering placing a tariff on imports of cotton. Please prepare a report for the president that evaluates this proposal base on the criteria listed below. you may assume for the purpose of this exercise that the import tariff has an effect equivalent to closing

Opportunity cost

1. (I think the answer is c but could possible be D) A test was scheduled for Monday morning, but you went to a party on Saturday night. If you hadn't attended the party, you could have studied for the test or gone to a movie. Which of the following sentences is true? a. The opportunity cost of going to the movie is studying f

Price Discrimination / Barriers to Entry

Discuss the following attached excerpt from a recent news article. In your discussion demonstrate that you can use the concepts of: "price discrimination," and "barriers to entry" to explain the current success of Harrah's strategy, and the prospects for continued success with their strategy.

A farmer and a rancher

8. A farmer and a rancher currently lead a subsistence existence, producing only meat and potatoes. The farmer could produce 2 units of meat per 40 hour week, or 6 potatoes, or any constant combination of the two. He currently splits his time between meat and potato production. The rancher can produce 45 units of meat, or 5 unit

Opportunity costs

(See attached file for full problem description and chart) --- Pg 51 # 3 Question: If it takes one hour to travel from New York City to Washington, D.C. by air, but it takes five hours by bus. If the airfare is $110 and the bus fare is $70, which would be cheaper for someone whose opportunity cost of travel time is $6 per

International Economy and Trade: The Answer to Heckscher-Ohlin Theory

How does the Heckscher-Ohlin theory differ from Ricardian theory in explaining international trade patterns? The Heckscher-Ohlin theory demonstrates how trade affects the distribution of income within trading partners. Explain. How does the Leontief paradox challenge the overall applicability of the factor-endowment mode

International trade opportunity for workers

In a committee meeting of the United Nations you are considering the following questions: 1. When is international trade an opportunity for workers? When is it a threat to workers? 2. What are some of the major challenges confronting the international trading system?

Intermediate microeconomics

Chap 1, 27. Suppose that the government wants to increase Social Security taxes by $1 per hour of work and is undecided between increasing the tax on workers and increasing the tax on employers. According to the last sentence of this chapter, " the resolution of this conflict ultimately makes not one bit of difference to any

ROA, debt/equity, ROE

Can you walk me through the steps to solve these problems? Lily Cosmetics has annual sales of $400,000,000 maintains a net after tax profit margin of 5% and has a sales-to-assets ratio of 4 a. What is its return on assets? b. If its debt/equity ratio is 1.0 , what is the return

US multinational and currency denomination for offshore operations

Select a U.S. multinational company. In terms of currency denomination, Discuss how the firm prices its revenues and costs. For MNE's ( MULTINATIONAL ENTERPRISES) with multiple foreign operations, consider any one of those operations and the contribution it is making to the parent firm's profits. Using this information what

International Trade Restrictions

Suppose that the world price for steel is below the U.S. domestic price, but the government requires that all steel used in the United States be domestically produced. a. Use a diagram like the one in Exhibit 5 to show the gains and loses from such a policy. b. How could you estimate the net welfare loss (deadweight loss)

Employee Termination

I am trying to defend my view on the following: In the two years prior to its merger with Nextel, Sprint Corporation cut approximately 2,000 employees. In addition, Sprint outsourced nearly 90% of its Information Technology functions from within the company to lower-cost countries outside the United States. Approximately 40

NAFTA vs Comparative Advantage

Explain unequivocally why the foundation of trade has nothing to do with absolute advantage and only the law of comparative advantage is relevant. Isn't free trade good for two countries even if one of them has an absolute advantage (in terms of low costs and productivity) in all goods and services produced?

Oz and United States Exchange Rate

Let's estimate what happens to the exchange rate between the United States and the imaginary country of Oz. The ruler of Oz is a totalitarian wizard. Since the economy of Oz is centrally planned, they lack three important ingredients that would make them more effective: free market efficiency, capital investment, and technolo

Competition Among Traders: Trade Restrictions and Recession

1. Will a country do better importing or exporting a good for which it has a comparative advantage? Why? 2. Why does competition among traders affect how much of the gains to trade are given to the countries involved in the trade? 3. If you were economic adviser to a coun

Scarcity and Choice

5. The countries of Figistan and Blah are small island countries in the South Pacific. Both produce fruit and timber. Each island has a labor force of 1,200. The table below gives production per month per worker in each country: BASKETS OF FRUIT BOARD FT OF TIMBER Figistan workers 10 5 Blah workers 30 10 a. Which c

Consumer Price Index (CPI), government policies regarding the economy

1. Suppose that 1967 is the base year for the Consumer Price Index (CPI) and in 1988 the CPI is 340. What does this "340" mean? a.) What cost $100 in 1967 will cost 340 times as much in 1988. b.) What cost $100 in 1967 will cost $340 more in 988. c.) What cost $100 in 1967 will cost 100/340 (or .2941) times as much in 1988

Consumption, income and leisure time

Consider the problem of maximizing u(c,l) subject to pc + wl = w + y, where c is consumption, l (element of (0,1)) is leisure time, and y is non-wage income. Prove that leisure must be a normal good for the labour supply function to be downward sloping. Please use direct methods and comparative stats.

Payoff matrix, for two interdependent firms in duopoly

In the following payoff matrix, for two interdependent firms in duopoly: In the following payoff mat Produce Firm F DNP $10 $0 Produce -$30 $100 Firm H DNP $120 $0 $0 $0 My responses: a) What will firm F do and what will Firm H do? The only win situation for H is to produce and no production by

It is being incorporated as more and more of a component to international trade due to the concept of importing and exporting of same good classification whereas inter-industry is with different classifications of goods. The traditional concept of comparative advantage will do little to predict intra-industry trade. However, the following areas do help to explain intra-industry trade:

Suppose that country A has only 3 categories of traded goods and that A's imports and exports of the 3 goods are as follows: Good Value of Exports Value of Imports X $30 $100 Y 60 20 Z 60 80 My responses by section: a) Calculate Country A's index of intra-industry trade. {30/150 - 100/200} + {60/150 - 20/200} + {

Microeconomics Help

Find the production possibilities and comparative advantage Abe and Max are tailors. Their production possibilities tables for trousers and jackets are given below. Abe chooses production alternatives D, while Max chooses alternatives E from his alternatives. ABE: Production Possibilities Table Production Alternative