International Business
Do all six (6) questions below. Each essay answer must be at least three (3) pages long, double-spaced, 12-point font. Essays will be judged for structure, content and quality of analysis, based material covered in the class notes, textbook material or distributed PPT slides. For math problems, you must show your work to earn full credit. 1. In many ways, one could argue that the Neoclassical model of international trade is nothing but a spruced up version of the old Classical model put forth by David Ricard back in the early 19th century. Discuss. 2. You have been recently hired as an international business consultant with a Fortune 500 US-based toy manufacturing firm trying to enter the global marketplace. Your boss know that you had taken Professor Salmons course International Business and therefore should have good knowledge of the global marketplace. As such, she wants you to select an appropriate country outside of the US and provide the board with a SWOT analysis of this country, particularly highlighting some of the challenges and opportunities that might be involved. Write a 3-page summary of your presentation to the board, which will form the basis for your recommendation. Be sure to provide the reasons for the country you selected, especially given your clients industry and country of origin. 3. Consider some of the ways in which the legal and cultural environment of a foreign country, such as Japan, could affect the establishment and operation of an American clothing boutique business there. 4. Recently, the Trump Administration has imposed big tariffs on Chinese imports into America, as a way of reducing our trade deficits with that country. Some economist argue that such protectionist measures are self-defeating and that in the end, America is made better off by promoting free trade with China. Make the case both for and against the use of tariffs, as a good international trade strategy. 5. Carefully distinguish between portfolio investment and foreign direct investment. What are some of the factors that have affected the growth of each over the past two or three decades? What prediction can you offer for the future trends in the direction and type of such global investments, and especially in light of the ongoing COVID-19 pandemic. 6. The relative labor productivity in Brazil and Mexico of producing two goods, soya and corn, are given in the following table: Brazil Mexico Soya per unit of labor 0.05 0.02 Corn per unit of labor 1.25 1.40 i. Which country has absolute advantage in growing corn? ii. Which country should specialize in producing and exporting soya? iii. At what relative price of soya to corn would Mexico receive all of the potential gains from trade with Brazil? iv. If production in both countries occur under conditions of perfect competition, and if the wage rate is $2 per hour in Brazil and $5 per hour in Mexico, using your knowledge of microeconomic theory, how would you go about calculating the price of corn in both countries?
