1 -International Trade
Discussion
True or False and Why? I would like you to evaluate whether the following statements are true or false. Also, please provide your reasoning to support your answers.
1. Absolute vs. Comparative Advantage Suppose that U.S. has an absolute advantage in the computer production compared to Germany, while Germany has an absolute advantage in the auto production compared to U.S. This implies that U.S. has a comparative advantage in the computer production and Germany has a comparative advantage in the auto production.
Production Possibility Frontier (PPF) vs. Consumption Possibility Frontier (CPF)
The Production possibility frontier is always the same as the consumption possibility frontier. (Hint: (Compared the case of no trade versus free trade)
2 – Building Global Skills
Discussion
The U.S. market for computers is dominated by domestic firms such as Dell, Hewlett-Packard, and Apple. The U.S. market for consumer electronics is dominated by Japanese firms and brands such as Sony, JVC, Panasonic, Mitsubishi, and Toshiba. However, the U.S. automobile market includes both domestic firms like Ford and General Motors and formidable Japanese competitors like Toyota and Honda. Please discuss the following two questions:
2. Do some theories work better than others for different industries? Why?
What other industries can you think of that fit one of the three patterns noted in the chapter (dominated by foreign firms, dominated by U.S. firms, or dominated by a combination of U.S. and non-U.S. firms)?
