Ch 7 #1-3 - Jeff Phang 992268154 Ch 7 #1-3 1. Costs a)...

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Jeff Phang 992268154 Ch 7 #1-3 1. Costs a) Mexico $ . 40 00 $ . 32 00 $ . 48 00 $ . 204 00 United States $ . 75 00 $ . 55 00 $ . 70 00 $ . 260 00 Import cost: % 25 $ . 50 00 $ . 40 00 $ . 60 00 $ . 255 00 Import cost: % 30 $ . 52 00 $ . 41 60 $ . 62 40 $ . 265 20 Import cost: % 50 $ . 60 00 $ . 48 00 $ . 72 00 $ . 306 00 b) With trade costs at +50%, the value chain is sliced between Component Production and Office Services. This is, it is cheaper to outsource assembly and component production while keeping Office Services and Research and Development in the US. Office Services and R&D would cost more if produced in Mexico. c) With trade costs at +30%, the value chain is sliced between Office Services and R&D. This means it is cheaper to outsource assembly and component production and Office Services to Mexico while retaining Research and Development in the US. d)
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This note was uploaded on 04/11/2009 for the course ECON 160A taught by Professor Mojaver during the Fall '08 term at UC Davis.

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Ch 7 #1-3 - Jeff Phang 992268154 Ch 7 #1-3 1. Costs a)...

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