...1) Distinguish between a tariff and a quota. Who benefits from and who is harmed by such restrictions on imports? A tariff is the taxes that are imposed by the government of a country on imported and exported goods. A quota is the limitation that is imposed on limiting the amount of goods that is imported and exported. The government benefits from the tariff since it increases the GDP of a particular country. Traders benefit from the gain that can be obtained through the quota. The regulations on imported goods hurts the people who has to pay higher prices for the goods that is made by such industries. Reducing the imports will reduce the income of foreigners. This in turn will reduce foreign purchases in the country that put the tariff on the imported goods. 2) What is the law of demand? Give two examples of how you have observed the law of demand at work in the “real world”. How is the law of demand related to the demand curve? Law of demand is when the price of a good or service increases then the consumer demand for that particular good or service will decrease. One example would be the gas prices. We have all seen the price of gas go up and down and then back up again. When gas prices rise people tend to not purchase gas as much as they used to causing the demand to decrease. The price of gas would cause people to conserve the gas they had and not do as much running around as they used too. Another example would be the housing market. The prices of houses would...
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...Tariff and non-tariff barriers are two important barriers of international trade. These are one of the traditional forms of government interventions in the economic activity. Even today it is practiced by all the countries around the globe. The governments all over the world try to improve their economy by supporting domestic business, through the tariff and non-tariff barriers. Even though it supports domestic business over the foreign competition, it comes at the cost of the domestic consumer. The consumer is forced to pay heavy import duties for getting the quality products. Tariff and non tariff barriers are explained in the following paragraphs by stating how they are used in the global scenario and their importance in risk management of a country. Tariff barriers are the most common device used for regulating the imports. It is commonly called as import duty. A tariff is a tax levied on products by the country of importation. Tariffs are generally considered as the least restrictive international trade barrier and are classified in to two important categories namely Advalorem tariff and Specific or Flat tariff. The Advalorem tariff is the one which charges a particular percentage of the total value of the imported products. This type of tariffs is used for the products like crude oil which are not countable. The specific or flat tariff charges an amount based on the total number of units imported in to the country/region. These tariffs are used for the countable products...
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...Identify four key points from the reading assignments that were emphasized in the simulation The four key points emphasized in the simulation are; trade restrictions, tariffs, quotas, and trade negotiations. To arrive at trade restrictions a trade policy must first be created. A trade policy is a government policy; which directly influences the amount of goods and services a country is able to import and export (Mankiw, 2007). Tariffs are taxes placed on goods which are imported; just as quotas are placed on goods produced overseas, and sold here at home. Enforcing quotas when trading goods will eliminate the amount of foreign products sold in the United States; giving the U.S. the ability to compete and recover financially. For all of these steps to come together; the government officials must determine how the curve of demand will shift (Mankiw, 2007). Since, foreign countries will need to utilize U.S. currency to purchase U.S. goods and services; the demand curve could possibly shift in favor of the United States economy. In other words; the U.S. may make a profit and remain in the black during future trades. Also, the equilibrium must remain at a constant allowing the U.S. dollar to stay strong during trading of exports; and imports. For this to take place the U.S. dollar and exports become more expensive. Foreign exports will decrease in price, as the value of the U.S. dollar will increase in price. Governments are not affected by these changes in trade policy however;...
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...Box4.4 Case Studies and Applications p111-112 Minimum efficient scale 1) Why might a firm operating with one plant achieve MEPS and yet not be large enough to achieve MES? A firm that operates with one plant may only achieve minimum efficient plant size (MEPS) instead of minimum efficient scale (MES) in accordance to the size of the firm. This can be reasoned that the individual plant is not large enough comparing to a firm that operates with several plants. An individual factory can be categorized as a Short-run production, since it is only one factory, expanding the factory or building more factories will be considered as Long-run. Thus, the individual factory (one plant) of the firm is a fixed factor and the inputs are variable factors. The only way to expand firm production is to increase the outputs by increasing variable factors such as materials and labour. This process will lead to a similar theory of “economies of scale” consumption in the short-run period. MES will be relatively larger than MEPS in terms of production of outputs through this process. The example below will show why one plant cannot achieve MES, but instead only MEPS. Take the case of an Orange juice production firm with a single factory: The Variable factors include the number of workers and oranges (input), and the fixed factor is the factory itself. In order to increase output, the firm needs to increase the number of workers and oranges. The “economies of scale” will occur when oranges from...
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...Dial ‘M’ FOR MARINA [Type the document subtitle] 10/23/2013 Submitted By: Rajat Kumar(FT14355) Rishi(FT14361) Varun Dubey(Ft14394) a) We calculate the total costs per km for 100 vehicles of Marina Vehicles Maintenance Costs | cost / unit | Distance | | | 2000 | 2500 | 3000 | oil filter | 300 | 60 | 75 | 90 | lubricants | 200 | 160 | 200 | 240 | coolant | 300 | 120 | 150 | 180 | grease | 200 | 20 | 25 | 30 | spares | 500 | 100 | 125 | 150 | service charge | 750 | 150 | 187.5 | 225 | other expenses | 2000 | 400 | 625 | 900 | Total Expense | | 1010 | 1387.5 | 1815 | | | 101000 | 138750 | 181500 | Taxes green tax | 500 | insurance | 7500 | fitness certificate | 15000 | tyre change | 14800 | clutch repair | 2500 | brake linings | 2500 | total | 42800 | total tax for 100 vehicles per month | 356666.67 | Capital Investment Investment | | | | EPABX | 20000 | Telephone | 25000 | Software EPABX | 5000 | | | CRM SYSTEM | | CRM software | 300000 | Website development cost | 200000 | Hardware Cost | 200000 | Software Integration and Maintainence | 200000 | Furniture and Fixture | 500000 | Vehicle Tracking | 800000 | Training | 100000 | Total Capital Investment | 2350000 | Operating Investments Call center expense | 200000 | Office Overhead | 100000 | Call Tariff | | Fleet Strength | | 100 | 3750 | 200 | 5625 | 300 | 7500 | telephone rent | 2500 | Total | 306250...
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...After attaining freedom in 1949 china followed the principles of independence and self reliance and then later started economic and trade exchanges with foreign countries. Initially foreign trade development was relatively slow because of international politics. Before 1978 china’s trade was conducted under system of state trading where approximately a dozen foreign trade corporations monopolised all foreign trade. under this central plan regime imports were not encouraged much and also exports were allowed only to pay for the imports. its share of world trade has risen three times and its expected that will get tripled by 2020. But since the last 20 years china has witnessed a drastic change in its trade policies and patterns and china has expanded itself tremendously. many foreign trade corporations and some retain rights on some of the products. Licenses and quotas in agriculture and food products, machinery and electronics. China has recently become a trading nation and its tremendous potential has attracted developed and newly emerging economies which became evident when china joined WTO in 2000. China’s trade strategy has changed over the years, from primary to manufacturing in 1980’s and 90’s was the decade of mechanical and electronic products. This is the century of high tech IT products rapidly grabbing the market and which are highly in demand , also along with state enterprise private enterprise also engaging in foreign trade. From 80’s to 21st century china’s...
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...Year-wise analysis of additionality Year 2006: In the year 2006 a total of 19 wind energy projects were registered out of which 14 were small scale projects. Small scale projects: Additionality of 3 small scale projects has been studied as a sample. These projects are: 1. Generation of electricity from 6.25 MW capacity wind mills by Sun-n-Sand Hotels Pvt. Ltd at Soda Mada Rajasthan 2. 3.75 MW Small Scale Grid Connected “Demonstration Wind Farm Project” at Chalkewadi, District Satara, State Mahararashtra 3. 10.6 MW wind farm at Village Badabagh, District Jaisalmer, Rajasthan. All the 3 projects demonstrated investment barrier in the additionality. The 6.25 MW and 10.6 MW project showed that the cost of power generation through wind is higher compared to that of coal and fuel oil, whereas. The 3.75 MW project has shown how due to non payment by Maharashtra state electricity board the project participants were not able to repay the loan (50 % of the total project cost). This has also been shown as a regulatory risk by the project proponent. The projects have demonstrated technology barrier faced due to poor penetration of wind energy and uncertainty in power generation through wind. The 6.25 MW project also faced technological barrier by using higher capacity of WTGs (1250 Kw) and other barriers like investment in power evacuation, unskilled manpower and lack of experience due to new technology. The 10.6 MW project in Rajasthan faced regulatory barriers because the policies...
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...The Importance of Measuring Enterprise Impact Zachary Bloom BIS/221 February 16th, 2015 Thomas Klopfer The Importance of Measuring Enterprise Impact “Green hype and green washing may be on the endangered species list and going away, however, green IT for servers, storage, networks, facilities as well as related software and management techniques that address energy efficiency including power and cooling along with e-waste, environmental health and safety related issues are topics that won’t be going away anytime soon.” (Schulz, 2015) Renewable energy, recycled products and storing data are ways that a business can reduce its carbon footprint The question that needs to be asked is a business green washing their data or products to make it seem like they are environmental friendly. Carbon Footprint In week four my team and I did research and had a discussion over a video we watched on the importance of measuring enterprise impact. “Green washing is a form of marketing spin in which green PR or green marketing is deceptively used to promote the perception that an organization's aims and policies are environmentally friendly. Whether it is to increase profits or gain political support, greenwashing may be used to manipulate popular opinion to support otherwise questionable aims.” (Grant, 2013) The first conclusions we came to was none of us knew that data usage could be bad for the environment and that many companies can claim they use less data....
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...Case Analysis – U.S. Tariffs on Tire Imports from China Ramón Alejandro Lomas Iracheta BSM404 International Business Instructor: Dr. Carla Weaver May 24th, 2015 U.S. Tariffs on Tier Imports from China The decision of President Obama supported by the International Trade Commission of imposing a three year tariff to imports of tires from China has caused controversy. The United States Steelworkers argue that the tariff has brought benefits for them, which include more job capacity, increase in production and increase of sales. In the other hand, China called the tariff a “serious case of protectionism” due to the negative economic effects that imports of tires were causing to American employment and domestic production. China argues that while the tariff increases jobs in production sector, it also has a negative effect in jobs of sale sector, now some people who used to sell tires from overseas have lost their job. According to the Business Dictionary (2015) market disruption is “A decline in sales to the extent major economic hardships occur, such as one created by surge in imports at the expense of domestic industry” (p. 1). By following this definition, it can be assumed that the decrease of sales of American tires was caused by the amount of imports of Chinese tires. China is known for its ability of mass production at a low price, many companies opt for choosing China as supplier or workforce, but when it is not controlled, this could cause instability in the...
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...a product in a specific geographic area on country. Franchise- an agreement granted to an individual or group by a company to use that companies name, services, products, and marketing. Joint Venture- a common type of international business, in which a new company with shared ownership is formed by two businesses, one of which is usually located in the country where the now company is etablished. Foreign Subsidiary- often refered to as a wholly owned subsidiary, a branch of a company that is own as an independant entiry in a country outside of the on in which the parent company is located. Protectionism- the theory or practice of shielding domestic industries from foreign conpetition, often through trade barriers such as tarrifs. Trade quotas- a government- imposed limit on the amount of product that can be imported in a certain period of times, which protects domestic producers by decreasing foreing competition. Trade embargo- a government- imposed ban on trade of a specific product or witha speciffic country. Trade embargos are often declared to pressure foreign governments to change their policies or to protest human rights...
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...To what extent can free trade promote economic development and economic growth in LEDCs (30 marks) Trade protection is the process of erecting barriers to trade, such as taxes on imports, called tariffs, and trade liberalisation is the process of making trade free from such barriers. Free trade its natural course without tariffs, quotas, or other restrictions. Developing countries can benefit from free trade by increasing their amount of or access to economic resources. Nations usually have limited economic resources. Economic resources include land, labour and capital. Small developing nations often have the lowest amounts of natural resources in the economic marketplace. Free trade agreements ensure small nations can obtain the economic resources needed to produce consumer goods or services. This shows economic growth as there is an increase in the economy's productive potential and they can produce efficiently. However, it is argued that free trade can harm the environment because LEDC may use up natural reserves of raw materials to export. Also countries with strict pollution control may find consumers import the goods from other countries where legislation is lax and pollution is allowed. However, supporters of free trade would argue that it is up to individual countries to create environmental legislation. Free trade usually improves the quality of life. Nations can import goods that are not readily available within their borders. Importing goods may be cheaper for...
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...Furthermore the exports that U.S.A. can make will be almost nule due to the fact that they have a stronger currency compare to these nations. 5) There are two reasons why ppp does not exist: the first is that due to the fact that we have to deal with scarcity of resources, this leads to lach of sustitutes for traded producs, goods and services. The second is due to compounding effects. More specifically, it means that the exchange rates are affected by some factors, except from inflation rates, like government interference and differences in interest rates and disposable income. 6) The basic limitation about ppp theory and mostly relevant to the absolute form is the fact that they do not take into consideration reaal ecomonic factors like tarrifs barries to entry and trasportation costs. These three elements are vital because can determine if a transaction will take place or no. 7) The I.F.E. claims that foreign currencies with high interest rates will depreciate due to the fact that high nominal interest rates reflect expected inflation. Furthermore, according to that theory, nominal risk free interest rates include a real rate of return and an anticipated inflation. A firm that purchases on a frequent period of time foreign treasury bill,it may yield on average the same return as a domestic treasury bill. This concept is based on the differences on interest rates and are related with the fluctuation of exchange rates. 8) The I.F.E. is an important theory of international finance...
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...CHAPTER 4: TARRIFS CHAPTER OVERVIEW This chapter discusses the operation and effects of tariffs. The chapter first defines import tariff, export tariff, specific tariff, ad valorem tariff, and compound tariff. Next discussed is the effective rate of tariff protection and the process of tariff escalation. Attention then turns to postponing import duties via bonded warehouses and foreign trade zones. The chapter examines the welfare effects of an import tariff for a small importing country and a large importing county. It is noted that if a nation is small compared to the world its overall welfare necessarily falls if it levies a tariff on imports. If the importing nation is large relative to the world, the imposition of an import tariff may improve its welfare. The chapter then examines the merits of trade restrictions. Among the arguments for trade barriers are 1. Job creation, 2. Protection against cheap foreign labor, 3. Fairness in trade, 4. Maintenance of the domestic standard of living, 5. Equalization of production costs, 6. Infant-industry argument. Types of Tariffs Tariffs can be specific, ad valorem, or compound. 1.A specific tariff is expressed in terms of a fixed amount of money per physical unit of the imported product. For example, a U. S. importer of a German computer may be required to pay a duty to the U. S. government of $ 100 per computer, regardless of the computer’s price. Therefore, if 100 computers are imported...
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...Zona Perdagangan Bebas Terbesar, Transatlantic Trade and Investment Partnership Fenomena globalisasi ekonomi di dalam perdagangan internasional terus mengalami peningkatan yang signifikan. Pasar perdagangan bebas menjadi primadona dalam kancah global. Hambatan tarif, pajak barang masuk dan keluar, hingga biaya-biaya ekternalitas menjadi halangan besar bagi paling tidak para pelaku ekonomi yang menginginkan keuntungan bisnis sebesar-besarnya dengan proses perpindahan barang, jasa, maupun capital berjalan lancar dari satu negara ke negara lain. Kerjasama dalam perdagangan bebas dinilai mampu mendorong kelancaran aktivitas ekonomi dan bisnis untuk meraup keuntungan yang lebih besar. Atas pertimbangan inilah dua aktor adi daya ekonomi pemilik jumlah GDP terbesar di dunia; Uni Eropa dan Amerika Serikat, menginisiasikan perjanjian zona perdagangan bebas terbesar di dunia pada bulan Februari 2013 lalu. Perdagangan bebas ini akan berada di dalam rangkaian Transatlantic Trade and Investment Partnership (T-TIP) yang optimis terlaksana pada tahun ini. Presiden Obama, Presiden Dewan Eropa Herman Van Rompuy, dan Presiden Komisi Eropa Jose Manuel Barroso menyatakan komitmen untuk membangun hubungan perdagangan bebas ini bukan sekedar tujuan kemakmuran. Melalui negosiasi ini, Amerika Serikat dan Uni Eropa akan memiliki kesempatan tidak hanya untuk memperluas perdagangan dan investasi melintasi Atlantik, tetapi juga untuk berkontribusi pada pengembangan aturan global yang dapat memperkuat...
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...life cycle from the facts in the article? Shake out or decline * Sales have delcines by 0.3% pa in the last 5 years (Australian retailers) and expect to grow by the same amount in the next 5 years. Therefore profitability is not in clear decline, * Buyers have how power (information power, not dependent of traditioinal methods of shopping) * Suppliers have high power ( they can choose how where they want their shop or wether just online) * Australian has sturcuters in place whereby a few major players determine market trends and consumer offerings Remote Environment (eg PESTEL) What have been the remote environment trends that have driven the industry to its current state? Political – Not really mentioned - changes in tarrifs and taxes may shift balance of power Economic – Global Financial Crisis. Industry is very reliant on overall economic growth and prosperity. Social- Technological- Biggest Issue- Online reatialing has become bigger, information at buyers fingertips (literally), new technology emerging to provide cusomters with more of a service rather then just selling products (eg body scanners). Enviroment – not mentioned Legal- not mentioned Are these factors changing? Techology is the biggest one changing What will be their impact on future growth in the industry? If it is not utilised and controlled, different modes of retailing will take over Industry Environment (eg 5 forces) What are the forces within the industry that determine...
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