It can reach over 1000 F; it varies in color from red, orange, and white. Some people use it to cook food, defend themselves, and keep their houses warm. Fire may be just a tool to some people, but for me it has changed my life. It didn’t keep my house warm; it engulfed and destroyed everything I had in life.
It was a stormy night that July evening, and my parents had left me with my grandma because of my fears of storms. As my parents drove off to Syracuse for the night, my brother Mark was left alone with the thought of peace and quiet. The flipping through the phonebook by my grandma woke me up out of a sound sleep, and soon my worst fears were realized. Just down the street my house was being burned to the ground. My brother gout out safely, but a couple of our household animals did not, unfortunately.
The fire started in the basement, and ran right up through the walls o the second floor. The room right above the fire was indeed my bedroom. If storms had not have been such an issue for me, maybe it would have been me that didn’t make it out of the fire. Personally, I believe someone was watching me that night, and it was not my time to go. To this day, my goal is to live life to its fullest. Not a day goes by when I don’t; you never know when your time could be up. Before that fire I was a person who was always thinking about the consequences from having a little fun. After that fire, many people considered me a changed person.
All of my clothes besides the ones I had on my back were destroyed. At some points we literally had to wear the same clothes everyday. Eventually, we were generously donated money so we could shop at Wal-Mart for clothes. Even though this wasn’t the “cool” place to get clothes, I realized that his was all I could get and I faced that fact. Very quickly I was taught that you sometimes have to appreciate the things you have, and not worry about what other people may think. This is something that will stay with me forever.
The fire that night may have caused a ton of trauma to my family and me. Although, as a sit here I realize it has been five years and three months to the date. I have come along way since that day, and it has done so much for me in the long run.
INTERNATIONAL ECONOMICS 6 Running Head: INTERNATIONAL ECONOMICS 1 International Economics Name Institutional
INTERNATIONAL ECONOMICS 6
Running Head: INTERNATIONAL ECONOMICS 1
Identify and discuss at least two challenges of the international trading system. Make sure to use examples to illustrate your understanding of the concept. Your response should be at least 75 words in length.
The biggest challenge to the International trading system has always been finding a good equilibrium between, free trade and measures of protecting poor countries. International trade should be free trade with no interference from the government. This has not been true since the United States and Europe have been giving endowments domestically to producers when shipping overstock to other most poor countries. This has caused unfair competition in the international trading system because the poor countries cannot offer such endowments to their domestic producers.
Another challenge is the protest from workers who have been suffering due to the inequalities, employment wages, alleged currency imbalance, and outsourcing threats.
Discuss the law of comparative advantage and how it applies to international trade. Your response should be at least 200 words in length.
Comparative advantage is a law in economics which demonstrates ways which protectionism is not required in free trade. The law suggests that free trade works even if one associate in a deal holds in every area of production, the absolute advantage, which states that one partner, is making products cheaper, better and fast than its trading partner (Laursen, 2015).
Primary fear of nations to penetrate in free trade is the reason that they will become out-produced by a country possessing an absolute advantage in many areas leading to imports with no exports. Comparative advantage has stipulated that countries must specialize in certain class of export products and still import the rest even when it has an absolute advantage in every product (Neary, 2016).
For example, Britain at some point provided comparative advantage support by outsourcing its food intensification (importing meat, grains, cheese, and wine) and focused on manufacturing of export goods, thus it became the workshop for the globe at the industrial revolution period. Comparative advantage has urged countries to involve in true free trade and specialize in areas where they hold the maximum comparative advantage, other than looking to bolster industries fragile from foreign competition through applying protective tariffs which may stifle production which brings overall gain in wealth.
Illustrate, using a hypothetical scenario (data), how a nation could have an absolute disadvantage in the production of two goods and could still have a comparative advantage in the production of one of them. Your response should be at least 75 words in length.
Suppose France and the united States only produce two goods, donuts and soda. American workers assumed they produce 50 bottles of soda and 100 donuts in one hour. French workers with the same amount of time assumed that they can produce 25 bottles of soda and 25 donuts. It is clear that France has absolute advantage in the production of both goods as compared to the United States.
Absolute advantage exists when a country is able to produce a product cheaply than another country in absolute terms. A nation producing two types of goods has absolute advantage because its labor requirements are lower.
Describe the relationship between transportation costs and international trade. How are the two linked? Your response should be at least 75 words in length
Transport costs have a huge impact on the nature and volume of international trade. Changes in transportation costs has been a drive to the rise in the international trade as they influence the modal choice, the organization of production and the commodity composition of the trade. New production methods have also placed increased demands in the transport systems.
Recent decline in transport costs has been a prominent possible explanation of the rise of international trade.
Illustrate the principles of absolute and comparative advantage by using two nations in a hypothetical investment scenario. Your response should be at least 200 words in length.
Considering two countries A and B in hypothetical investment scenario, by first considering the absolute advantage, country a can produce 5 tons of wheat each month by using 3 workers. Country B can produce 8 tons of wheat each month using 3 workers. Assuming that the workers of both countries are equally paid, country B has the absolute advantage over the country A in wheat production every month.
The absolute advantage principle is that it refers to individual’s ability to produce more of goods or services than competitors and in such a case, since country B has the most absolute advantage, it has the ability of attracting investment compared to country A.
Now considering two countries C and D in a hypothetical scenario, considering comparative advantage, if country C uses machinery, workers can produce both chairs and stools, at 7 in an hour and in country D with lower technology machinery, a worker can produce either 5 chairs or 2 stools in an hour. Both countries can trade because their internal trade offs between chairs and stools differ. Country D possesses comparative advantage in chairs finding it more efficient to manufacture more chairs and trades them to country C. The principle is if a country produces particular commodities at low opportunity and marginal costs over another, it will still benefit through both engaging in trade as long as they possess diverse relative efficiencies.
The factor-endowment theory suggests you should trade in the products that you can make from the production factors and resources you naturally possess. Depending on the country in which you live, identify in what your country should trade and what your country should import. Explain your answer in as much detail as possible. Your response should be at least 200 words in length.
The factor-endowment theory also known as the Heckscher-Ohlin complements the Ricardo’s comparative advantage theory which does not give details on the basis of comparative advantage for goods selected. Factor-endowment theory is a trade theory that states, factor abundant is a basis of comparative advantage of commodities as compared to other commodities. It states that a nation should specialize in producing products that it has abundant factor and import products that it has limited or less abundant factor.
The factor-endowment theory suggests that one should trade in products which he makes from the factors of production and the resources which he naturally have. Depending with the nation which one lives in, he should identify what the country should trade on and what it should import.
Factor endowment affects nation’s comparative advantage by upsetting the opportunity cost to specialize in producing particular goods virtual to others. An example is with respect to land would be availability of natural resource like oil. A country with abundant oil will export oil focusing on internal resources towards producing the factor it posses in quantity.
Factor-endowments are not static. For example with education, the labor force characteristics can change and the same holds true for infrastructure and investment capital (Carbaugh, 2013).
Carbaugh, R. J. (2013). International economics (14th ed.). Mason, Ohio: South-Western.
Laursen, K. (2015). Revealed comparative advantage and the alternatives as measures of international specialization. Eurasian Business Review, 5(1), 99-115.
Neary, J. P. (2016). International trade in general oligopolistic equilibrium. Review of International Economics, 24(4), 669-698.
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