International Business Midterm Globalization The process by which we are moving toward a world in which barriers to cross-border trade and investment are declining; perceived distance is shrinking due to advances in transportation and telecommunications technology; material culture is tarting to look similar the world over; and national economies are merging into and interdependent, integrated global economic system. Thomas Friedman Argued that the world is becoming flat. Globalization The shift toward a more integrated and interdependent world economy.
Final Exam Part I 1. The imposition of an import tariff by a nation will NOT always increase the nation's. I will, in this problem, International economics midterm exam that by welfare you mean this in a strictly dollars and cents manner.
For another interpretation, refer to the final example. See the example below: All this money had there been no tariff, would've been handed on to consumers in the form of lower prices. With the tariff, however, some of this consumer surplus is redistributed though some may return through government programsbut the rest is lost.
The cost of protection is equal to the reduction in consumer surplus MINUS the increase in rent to producers. The cost of protection, or "deadweight" is equal to the reduction in consumer surplus - increase in rent -government revenues, as in the example above.
The"technological gap" model represents an extension of the H-O model because the H-O model viewed technology statically. The H-O model presumes technological parity among nations. This results then, however, in just another, static snapshot. By showing the process of technological advances, over time, the "technological gap" attempts to extend H-O over the dimension of time, showing a "motion picture".
When a nation imposes an import tariff, the nation's offer curve NOT will shift away from the axis measuring its import commodity. When a nation imposes an import tariff, its offer curve rotates toward the axis measuring the importable commodity. The Effects of a Tariff: The following figure shows the consumption, production, trade, revenue, and redistribution effects of an import tariff which the nation is assumed to be too small to effect world prices.
To recycle my previous example: The "effective" rate of protection is figured using the following formula: What the nominal tariff rate yields is the amount being tacked onto the price to feed the tariff.
The effective protection rate, in contrast, measures how well domestic value-added "finishers" are being served. Thus the effective tariff rate is more of interest to value added finishers and more likely to anger their domestic rivals while the nominal tariff rate is more interest to consumers.
Tariffs and National Welfare A nation cannot automiatically increase its welfare by imposing a tariff. The answer to this question depends on how you define the term "welfare. The effect of a tariff is to artificially raise the price of imports.
Society will be responsible for paying a portion of that costs, through a reduction in the consumer surplus, meaning that the consumer will have to pay a higher price for the commodity on which the tariff is imposed.
On the other hand viewing tariffs from another perspective, that of society in the long run, a tariff may be a beneficial, though not the most efficient means, of maintaining a country's economic health.
The tariff, off course, benefits the producer who gets higher prices and a chance to sell more of his goods and the government, which has a larger budget it may recycle back to the consumer. The producer, then, can continue to survive at a particular level in his own home market.Economics B1 International Economics Midterm Exam , Friday 26 February C.
Smith You have 50 minutes to complete this exam. Points allocated to a question are shown in brackets beside the question for a total of Answer ALL questions. Calculators and other electronic devices may NOT be used during the exam. 1. Name: _____ Date: _____ ECON Theory of International Economics - Midterm Exam - Fall 1.
Ricardo's theory of trade discredited the idea that inflows of gold or silver as a result of exporting helped a nation, whereas the outflows of gold or silver as a result of importing hurt a nation; that was known as: A) export preference.
Grading in the course will be based 25% on the case presentations, 25% on the midterm exam and 40% on the final exam and 10% for class participation. Questions or messages may be sent to me via e-mail at [email protected] and [email protected] Economics B1 International Economics Midterm Exam , Friday 26 February C.
Smith You have 50 minutes to complete this exam. Points allocated to a question are shown in brackets beside the question for a total of Econ International Trade. HW Assignments .pdf files) HW Answer Keys .pdf files) Quiz Answer Keys .pdf files).
Theory & Policy; Sawyer, W. Charles & Richard L. Sprinkle, International Economics. Both books are optional but highly recommended. COURSE OBJECTIVES: This course has two objectives: Each midterm exam is worth 20% of the final grade.
• Final Exam. The final exam will be worth 30% of the final grade. All problem sets are due IN CLASS.