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Why don't more U.S. companies transfer their operations to Mexico or China and take advantages of low wages in these countries? For example (ignoring geopolitical factors), what would cause an identical plant in China to be more productive or less productive than its U.S. counterpart?
You work for a firm on Wall Street that specializes in mergers, and you are the team leader in charge of getting approval for a merger between two major beer manufacturers in the United States. While Table 7-2 in the text indicates that the four-f..
In Peru each worker can produce 30 bushels of corn per year, while in Colombia each worker can produce 40 bushels of corn per year. This implies that Colombia should specialize in corn production when trade is opened up between these countries.
If offshore assembly provisions were extended to include more goods and services, what would this do to the actual level of protection provided by a nation's nominal tariff schedule? Describe your reasoning.
Steel is labor intensive and rice is land intensive. According to the long run Heckscher-Ohlin model what happens when these two countries move frome no trade to free trade? Wages in France's rice industry? Wages in France's steel industry?
Think that the following model of a small open economy, and Where X = exports, M = imports, e = the real exchange rate=50, Yf = foreign income = 2000.
Productivity is found by dividing the country's gross domestic product by the number of people employed. Only part of the US productivity growth, can be explained by the longer hours Americans are putting in [The US] also beats all 27 nations
A contractor for the U.S. Defense Department produces airplanes from capital (K) and labor (L) by the production function: A = K times L 2 The marginal product of labor (MPL) = 2KL. The marginal product of capital (MPK) = L 2 .
Generally one can borrow up to 95% of the value of US government bonds with the borrowing cost normally about .25% or 25 basis points above the yield on the bonds. Assume that the yield on the bonds is 8% and that they borrow for the full 10 years..
What would be the short-term and long-term effects of restricting or removing patent protection of pharmaceuticals? Be sure to discuss prices, industry profits, and consumer welfare2. Why are prices for pharmaceuticals higher in the United States ..
Consider trade relations between the United States and Mexico. Assume that the leaders of the two countries believe the payoffs to alternative trade policies are as follows: United States' Decision Mexico's Decision Low Tariffs U.S. gains $25 billi..
While some politicians favor protectionist policies because they feel these policies protect domestic producers, others claim free trade increases economic activity and has advantages for the country as a whole. Describe a recent foreign purchase.
Let us determine what happens to exchange rate between the U.S. and imaginary country of Oz. The ruler of Oz is a totalitarian wizard. Since the economy of Oz is centrally planned
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