Chapter 4 - Chapter 4 I. H-O-S Theorums: Factor...

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Chapter 4 I. H-O-S Theorums: Factor endorsements or factor proportions theory of trade II. Samuelson:extended the HOS Theroum: factor price qulatization theory of trade(what give countries comparative advantage a. Factor=factor of production i. Land labor capital b. Hecshor-Ohlin Concepts i. Factor endorsements ii. Factor abundance in countries iii. Factors intensity of production 1. Labor intesnse product III. Different Types of Trade a. Inter industry - Ricardiem Paradigm (comparative advantage) b. Intra Industry Trade - New Trade Theory i. Economies of scale, product differentiation, and technological change c. Inter-firm Trade - Within the firm- International Economies of Scale i. trade of parts and components that ultimately assemble into the finish product ii. an alliance of firms or alliance of firms iii. Ford would be a good sense in the way that it cooperates within itself iv. Global Oligopolies- small sellers that have power in the market v. Global Supply management and a rapid process that has been going on for years 1. Outsourcing benefiting 2. Cheaper 3. You have a lot of in sourcing- a. Foreigners coming to the US
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vi. There are more jobs created by foreign companies then American companies vii. Includes location decision based on comparative advantage IV. Economies of Scale a. Economize means to become more efficient and get more bang for your buck b. Efficiency gains derived from sized c. Way to make it happen is that you increase your production volume
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This note was uploaded on 12/02/2010 for the course ECO 142 taught by Professor Guttman during the Spring '10 term at Hofstra University.

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Chapter 4 - Chapter 4 I. H-O-S Theorums: Factor...

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