Global Managerial
Economics
There are 2 parts
to this question Part 1 has 2 sections and Part 2 is one. Please read all
requirements
Part 1 (Macro and
Microeconomic Concepts in a Global Context) – write 400–600 words
Part A
You are a
business owner firm that manufactures a specialized product in the United
States. While developing a 5-year strategic growth plan, you have decided to investigate
the benefits and disadvantages of expanding internationally. Research the
issue, and discuss the following:
How would
international expansion affect your business?
What are the
risks, advantages, and disadvantages to your business of international
expansion?
Do you think it
is worth it?
Part B
If you were the
owner of an automobile company and decided to market internationally, would you
face imperfect, monopolistic, oligopolistic, or perfect competition? Please
justify your answer.
What sort of
circumstances would you have to be aware of, and why?
What if you were
a major retailer in the United States?
Part 2 – (Costs)
– 800 – 1000 words
Suppose that
there are two products: clothing and soda. Both Brazil and the United States
produce each product. Brazil can produce 100,000 units of clothing per year and
50,000 cans of soda. The United States can produce 65,000 units of clothing per
year and 250,000 cans of soda. Assume that costs remain constant. For this
example, assume that the production possibility frontier (PPF) is a straight
line for each country because no other data points are available or provided.
Include a PPF graph for each country in your paper. Chapter 5 of the Suranovic
text is a good reference for this task. (https://saylordotorg.github.io/text_international-…)
Complete the
following:
What would be the
production possibility frontiers for Brazil and the United States?
Without trade,
the United States produces AND CONSUMES 32,500 units of clothing and 125,000
cans of soda.
Without trade,
Brazil produces AND CONSUMES 50,000 units of clothing and 25,000 cans of soda.
Denote these
points on each COUNTRY’s production possibility frontier.
Using what you
have learned and any independent research you may conduct, which product should
each country specialize in, and why?
To assist in your
thinking and discussion, additional questions to consider include:
What is the
labor-intensive good?
What is the
Marginal Rate of Transformation impact?
What is the
labor-abundant country?
What is the
capital-abundant country?
Could trade help
reduce poverty in Brazil and other developing countries?
