Business Finance
Answer those economic questions

Question Description

Please write the steps and process clearly.

Please combine some knowledge of globalization.

Thank you very much.

Unformatted Attachment Preview

International Trade and Finance: Review questions for midterm 1. Use the production possibilities below to answer this question Alpha’s production possibilities : Steel (tons) Wheat (tons) A 60 0 B 45 15 C 30 30 D 15 45 E 0 60 Omega’s production possibilities : Steel (tons) Wheat (tons) A 20 0 B 15 15 C 10 30 D 5 45 E 0 60 a. Draw domestic production possibilities for Alpha and Omega (hint: these are linear tradeoffs). b. Suppose each country specializes in its comparative advantage, and the terms of trade are 1 ton of steel for 2 tons of wheat. Can Alpha and Omega both achieve a level of consumption outside of their production possibilities? Use the graphs from Part a to explain your answer. c. Suppose in autarky (i.e. as a self-sufficient economy) both Alpha and Omega produce at point C on their respective production possibilities functions. Based on your answer to Part b, how much has total consumption increased for both Alpha and Omega? 2. Suppose the American Association of University Professors (AAUP) successfully coordinated and lobbied congress to pass a requirement that all professors at U.S. universities must have graduate degrees from U.S. universities. a. How would this requirement affect the market for 4-year college degrees in the U.S.? Graph and explain your answer. What would happen to tuition and the number of degrees conferred? b. How would this requirement affect the market for graduate degrees at universities outside the U.S.? Again, graph your answer and explain what would happen to both tuition and the number of degrees conferred. c. Suppose that the requirement were instead that all professors at U.S. universities had to be U.S. citizens, but there was no requirement that professors’ graduate degrees be conferred by U.S. universities. How would this policy change your answers to Parts a and b? 3. Name a good or service that the U.S. exports that you believe is an example of U.S. firms’ comparative advantage. a. Explain where you believe that comparative advantage comes from. Do you believe the comparative advantage is best explained by factor conditions, domestic rivalry, or network externalities from related and supporting industries? Explain your answer in 5-8 sentences. b. Explain how the Product Life Cycle Theory applies to the good or service you chose, and which country(ies) you believe will be the future exporters of this product. Make your case in 4-6 sentences. 4. Medical Doctors earn much higher salaries in the U.S. than in most of the world. Salaries vary widely by specialty and region, but the average for all physicians is roughly $200,000 per year. Explain why, in 3-4 paragraphs. You may give more than one reason, but use the labor market for doctors’ services to explain your answer. A graph is not required, but it can clarify your thinking. 5. Using consumer behavior theory, i.e. utility-maximization theory, to explain how international trade makes consumers better off in terms of individual utility. Who is harmed by international trade? Explain how, using the tools of microeconomics. Your answer should be 3-4 paragraphs long and should include supply and demand graphs where appropriate. 6. In 3-4 sentences, explain how growth in international trade can lead to rising average wages for workers in developing economies. In 4-6 sentences, explain how growth in international trade can lead to rising average wages for workers in advanced economies. Use supply and demand models of the labor market in each of your answers. ...
Purchase answer to see full attachment

Final Answer


nasir0040 (13654)
Boston College

Solid work, thanks.

The tutor was great. I’m satisfied with the service.

Goes above and beyond expectations !


Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors