{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

26-class notes

26-class notes - TODAY class 26 Nov 13 Causes of...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
1 TODAY – class 26 – Nov 13 Causes of International Trade (continued) – finish Comparative and competitive advantage Brander (8, pp 159-166) Mon Nov 16: Debate 3 – local consumption of food Wed Nov 18: cont. trade (for 101,102 – Debate 4 moved to Wed for section 103) – Increasing returns: history of trade policy - importance of the Auto pact; Improvements in communication and Comm394- Barbara Spencer of the Auto pact; Improvements in communication and lower trade costs – Outsourcing Brander (8, 166-169); Brander (9, 185–190) Friday Nov 20 – Debate 4 –bailout of GM & Chrysler (sections 101,102) Location Final Exam December 15: 8:30 am; Scarf 100 S f Ed ti b ildi 2125 MAIN MALL Scarf – Education building, 2125 MAIN MALL
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
2 Comparative advantage Defn: A country has a comparative d t i th d ti f X if th advantage in the production of X if the opportunity cost of producing X is lower in that country than in other countries. – Countries export those products that they are relatively good at producing as determined by comparative advantage . – Idea due to David Ricardo (1807) Competitive Advantage Competitive advantage (for a firm): the bilit t d d t f i lit ability to produce a product of given quality at lower cost than its international rivals. – What is the effect on competitive advantage of higher domestic wages? a decrease in the value of the domestic currency? – E.g. CAD falls from $1 USD to $0.85 USD. – Firms that have a competitive advantage are able to export.
Background image of page 2
3 Example: Competitive Advantage Output per worker per week Manufacture Assembly Manufacture Canada 2 2 Fiji 1/2 1 FAST- TEST – layoffs and hiring are possible What is the productivity of Fiji relative to the productivity of Canada in assembly? productivity of Canada in assembly? …………….
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}