Research any two scenarios of international trade or environmental policies impacting local businesses. Then discuss if the policies encompass all races, genders, and socioeconomic groups, ensuring equity. What challenges do nations and governments face when streamlining energy costs, reducing fossil fuel use, and moving toward zero-carbon energy? As a global citizen and a nurse, how would you influence policies for tackling environmental problems?
Tag: International Trade
International trade
International trade is subject to trade regulations and industrial policies. The Kingdom of Saudi Arabia is also subject to these regulations because of signed trade treaties or membership in various trade organizations. For this week’s discussion, please:
· Discuss Saudi Arabia’s participation in the World Trade Organization (WTO).
· Then, compare and contrast the Kingdom’s WTO involvement with its participation in the Gulf Cooperation Council, League of Arab States, and the Trade and Investment Framework Agreement (TIFA) Saudi Arabia signed with the United States.
· Which membership or trade agreement benefits Saudi Arabia the most?
· Please explain your position.
International Trade
Write an essay of at least 500 words where you make arguments as to why the country should trade internationally. Your arguments should be based on the
material covered in the first 6 chapters of the text. The arguments should be the concepts and key-words from the chapters and should address, at the very
least, the following topics:
-What are the Names of the various theories of International Trade covered in the textbook.
- What are the benefits of trade according to each theory and where they come from (according to the text.)
-Who benefits and who loses from trade and why ?
{Again, the goal is for you to express your understanding of what was covered in the first 6 chap
International trade
International trade can have big effects on domestic markets. For both an import good and an export good (in other words, address each bulleted item below twice—once for import and once for export), describe how opening up to international trade affects the following:
supply or demand for the particular good,
the competitiveness of that good’s market, and
how the change in competitiveness affects equilibrium price and quantity.
International trade
International trade can have big effects on domestic markets. For both an import good and an export good (in other words, address each bulleted item below twice—once for import and once for export), describe how opening up to international trade affects the following:
supply or demand for the particular good,
the competitiveness of that good’s market, and
how the change in competitiveness affects equilibrium price and quantity.
International Trade
The U.S. economy relies heavily on international trade. Choose two transactions at random that result from international trade; one where purchases are made from another country and one where the U.S. sends a product to another country. Identify the impact of each of these on imports, exports, net imports, and net exports at the time the transaction takes place.
For example, if you purchase a product online that is made in and shipped from Italy to you in the United States what is the effect on the U.S. economy in these four categories at the time of the transaction?
In addition, there has been a lot of news in recent years surrounding tariffs. Exactly what is a tariff and what is the impact of tariffs on international trade? Who pays the cost of tarffs?
International trade
After reading the article, Amadeo, K. & Boyle. M (May 18th, 2021). International trade: Pros, cons, and effect on the economy. the balance., provide an advantage and a disadvantage of international trade. In your opinion, how do these impact the economy? Provide feedback to at least two of your classmates.
International Trade
Evaluate two of the scenarios listed below and explain the best solution for each. Include comments related to any ethical issues that arise. Support your responses with appropriate cases, laws and other relevant examples by using at least one scholarly source
Scenario 1—International Trade
The Director of Purchasing for parts distribution company wants to purchase steel coach screws from Germany; however, he is not sure what the best option is. The director comes to you and asks your opinion. You know that Germany, Canada, and Korea are the best sources for obtaining this product. While your research shows coach screws from Germany are of the highest quality, the United States imposes a tariff of 12.5%, which makes this option noncompetitive.
Which US trade laws should you consider when selecting a country?
Is there any way by which you can seek a reduction on the tariff? If so, how? If not, why?
Select an alternative country (Canada or Korea) for purchasing the coach screws and explain your reasons for selecting the country.
Scenario 2 – Bribery
Slyce Pizza Company purchased four commercial refrigerators for the restaurants and eight pizza ovens from a supplier in Italy. Between the shipping costs, delays, and unanticipated duties, the purchasing manager was worried that his boss would be upset about the total costs. In an effort to reduce costs, the manager offered a US Customs officer $500 in cash to re-classify the imported goods to reduce the amount of duties owed.
Analyze the legal and ethical ramifications of the purchasing manager’s offer to the customs official?
Would it make a difference if the purchasing manager offered to donate $500 to St. Jude Children’s Research Hospital if the officer expedited the paperwork necessary to release the goods from custom’s custody?
International Trade
1 True/False
For each of the following statements say whether it is true or false and explain why using a couple
of sentences, graphs or equations.
(a) The World Trade Organization can impose fines on its member countries violating its trade
rules.
(b) The optimal tariff for a given good is larger for a large country than for a small country.
(c) If marginal cost of serving two markets is identical, then a profit maximizing firm with market
power would set the same price in both markets.
(d) When domestic and foreign firms compete as oligopolists, production subsidies are always
welfare-improving because they shift profits from foreign competitors to domestic firms.
(e) In trade negotiations a gain for one country is a loss for another country, so a multilateral
trade agreement cannot make all the parties better off.
2 Tariff for a Large Country
Consider a world composed of two large countries: Home and Foreign. Suppose the demand and
supply of cars in Home are, respectively:
D = 29 − p and Q = p − 1
In Foreign the demand and supply are:
D∗ = 11 − p and Q
∗ = p − 1
(a) Free trade
(i) What is the free trade price of cars pF T ?
(ii) How many cars does Home import?
(b) Now imagine that Home imposes a tariff t per car on imports from Foreign.
(i) Find the price of cars on the world market (call it pW ) and on the Home market (call it
pT ) as a function of the tariff t.
(ii) How many cars does Home import as a function of the tariff t?
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(iii) How large is the prohibitive tariff (i.e. tariff beyond which Home resorts to autarky)?
(iv) Calculate numerically the total change in welfare for Home (relative to free trade) as a
function of the tariff t. Plot this relationship in a figure.
(v) Find the optimum tariff, that is the tariff that allows Home to achieve the highest welfare.
(vi) In a graph with Home demand and Home supply show the net change in welfare associated
with the optimum tariff.
(c) Now suppose the Home government is not fully benevolent. It still cares about the consumers,
but puts a 25% higher weight on the welfare of car producers (who are more likely to make
political donations), and puts a 50% higher weight on its own revenue (which it can spend
in a way maximizing its reelection chances). Formally, the government maximizes its welfare
function WG (t) given by
WG (t) = CS (t) + 1.25P S (t) + 1.5GR (t),
where CS (t), P S (t), and GR (t) denotes the consumer surplus, producer surplus, and government revenue, respectively, all as a function of the tariff t.
(i) Find the tariff maximizing the government’s welfare function.
(ii) Is this politically optimal tariff higher or lower than the optimum tariff you have found
in part (b)? Provide an intuitive explanation for your finding.
3 Export Subsidies and Production Subsidies
In a small Home country market for a good is described by the following demand and supply curves:
Q
D = 150 − p
Q
S = p
Home can also sell to and buy from a world market at a world price of 100.
(a) Find the level of production, consumption, and exports of Home under free trade.
(b) Imagine now the government decides to boost domestic production by 20%, but is unsure
which policy to employ to help producers.
(i) Export subsidy
i. How large would the export subsidy need to be in order to increase domestic production by 20%?
ii. What effect would the export subsidy have on consumption and exports (relative to
free trade)?
iii. How large would be the net effect of export subsidy on Home welfare (relative to
free trade)?
(ii) Production subsidy
i. How large would the production subsidy need to be in order to increase domestic
production by 20%?
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ii. What effect would the production subsidy have on consumption and exports (relative
to free trade)?
iii. How large would be the net effect of production subsidy on Home welfare (relative
to free trade)?
(c) Based on your findings, which policy would you recommend to the government?
4 Tariff and Antidumping Duty with Foreign Monopoly
Demand for iPads in Home country is characterized by the following demand function:
Q = 12 − p.
The only supplier of iPads is Apple, a foreign monopoly with a constant marginal cost equal to 4.
Hint: If a monopolist faces a demand curve Q = A − Bp (where A and B are constants) then its
marginal revenue is MR =
A
B −
2
B Q.
(a) What price would Apple charge Home consumers under free trade? How many iPads would
the Home country import?
(b) Suppose Home government imposes a tariff t = 2 per iPad.
(i) How much would Home consumers now pay for iPads? How many would be purchased?
(ii) By how much would Home welfare increase or decrease due to the tariff?
(c) Suppose that instead of a tariff, Home government threatens to impose an antidumping duty
on Apple (because it noticed that iPads are sold at a higher price in Foreign). In response to
the threat Apple voluntarily raises its price to consumers by 2 (relative to the price it charges
under free trade).
(i) By how much would Home welfare increase or decrease due to the antidumping duty
threat?
(d) Which policy leaves Home better off: a tariff or an antidumping duty?
5 Trade Creation and Trade Diversion
Consider three countries: A, B and C. Country A is characterized by the following demand and
supply functions
Q
D = 28 − 2p
Q
S = 2p
Country B can sell any amount of a good at a constant price 4 while country C can sell any amount
at a constant price 3.
(a) Start from a case in which country A imposes a tariff t = 2 on imported goods no matter
where they are produced. How much will country A import from B and C?
3
(b) Consider a free trade area (FTA) between country A and country B (country A maintains
a tariff on imports from country C). How much will country A import from country B and
country C once the FTA is formed?
(c) Calculate the change in welfare for country A going from the tariff to the FTA with country
B. Is country A better off or worse off after forming the FTA with B than with the tariff?
Explain your result.
6 Review
Write a short review of one of the group video presentations (not your own, obviously) posted on
the Video presentations forum on Canvas. All presentations should be available by 5pm on Friday
Nov 27th. Please address these points:
• What is the question the presentation tries to answer?
• What data does the group use to address this question?
• What modeling framework do they use to think about their problem?
• Do you find their analysis compelling? What can you see as the main shortcoming? How
would you improve on it?
International trade
1) Compare and contrast Absolute and Comparative Advantage – and discuss how each relates to gains from trade.
2) Explain how trade barriers save jobs in protected industries, but only by costing jobs in other industries.
3) What might account for the dramatic increase in international trade over the past 50 years?