ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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A subfield of political science, the study of the interactions among the various actors that participate in international politics is called :
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- Present and explain two arguments that can be used (or are often used) against free trade.arrow_forwardA firm's production function is: q= 10L1/2K1/4 where q is the firm's daily total product, L is the quantity of labor employed in hours, and K is the quantity of capital employed in units. Assume that the quantity of capital employed is fixed at 256 units. The labor market is perfectly competitive, and the current wage is $12 per hour. The firm sells its product in a perfectly competitive market and the price is $6 per unit. a. What is the firm's value of marginal product for labor? b. What is the firm's profit maximizing quantity of labor?arrow_forwardFor analysing questions about “North-South" trade, i.e. trade between industrialised and less developed countries, are Ricardian models or Specific Factors models preferable? The answer should elaborate on which properties (focus on two) of the two models are likely to be important for the analysis and end with a conclusion, three paragraphs should be enough.arrow_forward
- Describe the role of intergovernmental organizations, and provide examples of the types of organizations that exist today.arrow_forwardCase Study 1: Comparative Advantage and International Tradearrow_forwardSuppose firms incur transportation costs to sell their product abroad. How do transportation costs affect the prices that firms charge abroad? Suppose the price offered at home and in the export market is identical, but there are transport costs to ship the good abroad. Does dumping occur? How does an increase in the number of product varieties benefit an importing country? Explain how increasing returns to scale in production can be a basis for trade. Why is trade within a country greater than trade between countries? Why would you expect sellers of branded goods with high upfront research and development costs to be more interested in free trade than producers who do not incur any fixed costs? Focus attention on the Ricardian model, the Heckscher-Ohlin model, and the monopolistic competition model if trade. Consider the intra-industry trade index for each model. What value for the index does each models predict? Explain your answer.arrow_forward
- Two countries, Alpha and Beta consider the construction of a bridge across a river that separates them. The bridge would increase commerce and trade in both countries. If they both contribute to the building of this bridge, then each receive a profit of $32 million. However, if they both fail to contribute, they are each left with a profit of just $30 million. If one country contributes and the other one does not, then the country that does not contribute is a “free rider” and will receive a profit of $35 million. The contributing player spends a lot of money building the bridge and is left with a profit of only $28 million. 5.1. Fill out the payoff matrix (below) for the game by including all the elements (players, their strategies, and their payoffs). 5.2. Assume the players do not cooperate. Solve the game for the Nash equilibrium (find out the strategy played by each player in equilibrium). What is the payoff each gets…arrow_forwardConsider the case of two (2) countries, China and South Africa, both producing textiles and beer. The table below shows output rates per day in the two (2) countries, if all resources are fully and efficiently employed. Use the information given to answer question 8 and 9. Textiles Beer China 5 10 South Africa 1 6 Refer to the table given in Question 8. Which of the following statements is correct? There is no opportunity for mutually beneficial trade between the two (2) countries. China's opportunity cost in the production of beer is lower than that of South Africa. China's opportunity cost in the production of beer is higher than that of South Africa. South Africa should produce textiles only and China should produce beer only and both countries should then trade with one another.arrow_forwardPlease help with the followingarrow_forward
- The table below shows one of the most preferred trade exercises in your class, according to your classmates' votes. Refer to it to answer the following question. Burrito 40/hr Bowl 44/hr Chipotle Hot Head Burritos 36/hr 42/hr Chipotle has comparative advantage in (type either burritos or bowls).arrow_forwardSometimes the exports of developing nations are concentrated in only one or a few primary products. For example, according to World Bank data, coffee constitutes almost 90% of Burundi’s total exports. Therefore, changes in demand or supply of coffee can have significant effects on the health of Burundi’s economy. The current world price of coffee is $5.00 per pound, but there is uncertainty about the shape of the demand and supply curves. The following graphs (scenario A and scenario B) show two possibilities for demand and supply in the market for coffee. Suppose that favorable growing conditions cause an increase in the global supply of coffee. On the following graph, shift the demand or supply curve of scenario A to show what happens in the market for coffee as a result of this event. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it…arrow_forwardwhat are differences between the distributive and integrative negotiations?arrow_forward
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