Questions:
1.Does exposure to competition with the world leader in a particular industry improve a firm's productivity? Discuss in detail by providing sound arguments to support your choice of response.
2.What are the essential arguments in favor of free trade and against free trade?
3.Is it possible to estimate the gains from trade? Explain when it can bet estimated and when it can't.
4.Explain how immigration and trade may worsen wage inequality, and how college education may mitigate against that.
5.How does Staffan Linder explain world trade patterns? To what extent is his concept applicable to today's trade practice? Discuss in detail.
6.Can import duties have unintended side effects? Discuss its effect on consumers, producers and government
7.Discuss why Ricardo's cost comparative theory explains better than Smith's Absolute Advantage the current trade pattern between the developing and developed countries
8.Discuss the factors that contribute to imperfect specialization in international trade
9.Demand and Supply TV Schedule
|
Total Price of TVs
In US $
|
Quantity demanded
|
Quantity
Supplied
|
|
600
|
0
|
60
|
|
500
|
10
|
50
|
|
400
|
20
|
40
|
|
300
|
30
|
30
|
|
200
|
40
|
20
|
|
100
|
50
|
10
|
|
0
|
60
|
0
|
Based on the provided figures in the above table
A) Under no international trade (domestic free market)
1) Determine the equilibrium price and quantity of TV. (This is in a closed economy)
2) calculate the amount of consumer and producer surplus
B) Under an open economy:
1)determine the producer and consumer surplus when price of TV is reduced by $200 from the original equilibrium to a new equilibrium due to free trade with the outside world
2)determine the number of imported TV sets
3)what is the size of domestic TV products?
C) Under tariff regime when the government applies a tariff of $100 on each imported TV
1)determine the consumer and producer effect
2)the total amount of revenue the government collects
3)determine the size of domestic and imported products
4)Summarize in one paragraph how the three scenarios affect the consumer, producers, government, and the overall economy. After going over the above calculation, do you think trade barrier will benefit the country applying such measure? Discuss.