Exam 2: Globalization and the Multinational Firm

The table below shows the bushels of wheat and the bottles of beer that North and South Dakota can produce per day of labor under two different hypothetical situations (Cases I and II). Case I Case II South Dakota North Dakota South Dakota North Dakota Wheat (bushels) 4 1 3 1 Beer bottles) 1 2 4 2 Which state has a comparative advantage in producing beer in Case I?

For case II,let the international price be 1 bottle = 1 bushel.Derive South Dakota's "trading possibilities curve."                     $\text { South Dakota }$ A B C D Wheat (bushels) 3 3 4 1 Beer bottles) 4 3 4 2

Deregulated financial markets and heightened competition in financial services provided an environment for financial innovations that resulted in the introduction of various instruments.Examples of these innovative instruments include

A corporation that can source its products in one country,sell them in another country,and raise the funds in a third country

The first two columns give the maximum daily amounts of beer and whiskey that Southern Ireland and Northern Ireland can produce when they completely specialize in one or another product.The last two columns give each country's consumption without trade. Maxirnumn beer production Maxirnum whiskey production Beer consumption without trade Beer consurnption without trade Northem Irelard Southem 500 1500 300 600 bottles Ireland 1200 600 400 bottles Suppose that trade occurs.Each country completely specializes and 500 kegs of beer are traded for 500 bottles of whiskey.What is the international price of beer?

The table below shows the bushels of wheat and the bottles of beer that North and South Dakota can produce per day of labor under two different hypothetical situations (Cases I and II). Case I Case II South Dakota North Dakota South Dakota North Dakota Wheat (bushels) 4 1 3 1 Beer bottles) 1 2 4 2 Which state has an absolute advantage in producing beer in Case I?

Suppose Mexico is a major export market for your U.S.-based company and the Mexican peso appreciates drastically against the U.S.dollar.This means

Restrictions or impediments to free trade include such things as

Underlying the theory of comparative advantage are assumptions regarding

Suppose your firm invests $100,000 in a project in Italy.At the time the exchange rate is $1.25 = €1.00.One year later the exchange rate is the same,but the Italian government has expropriated your firm's assets paying only €80,000 in compensation.This is an example of

Under the theory of comparative advantage,liberalization of international trade will

Although the world economy is much more integrated today than was the case 10 or 20 years ago,a variety of barriers still hamper free movements of people,goods,services,and capital across national boundaries.These barriers include

Suppose that Northern Ireland and Southern Ireland each have 1,000 hours of labor per day.Southern workers are paid €1 per day and Northern workers are paid £1 per day.What is the approximate exchange rate associated with an international price of one keg of beer = 1 bottle of whiskey? Now suppose that Southern workers are paid €1 per day but the Northern workers receive a raise to £2 per day.Will trade be possible at the exchange rate you found?

The first two columns give the maximum daily amounts of beer and whiskey that Southern Ireland and Northern Ireland can produce when they completely specialize in one or another product.The last two columns give each country's consumption without trade. Maxirnumn beer production Maxirnum whiskey production Beer consumption without trade Beer consurnption without trade Northem Irelard Southem 500 1500 300 600 bottles Ireland 1200 600 400 bottles What is the increased number of goods available in Northern Ireland after trade?

The table below shows the bushels of wheat and the bottles of beer that North and South Dakota can produce per day of labor under two different hypothetical situations (Cases I and II). Case I Case II South Dakota North Dakota South Dakota North Dakota Wheat (bushels) 4 1 3 1 Beer bottles) 1 2 4 2 Which state has a comparative advantage in wheat production in Case I?

The goal of shareholder wealth maximization

The doctrine of comparative advantage was first put forth by

Prior to World War I ending,the dominant global currency was the

Deregulation of world financial markets

A true MNC,with operations in dozens of different countries