There are 2 parts to this question Part 1 has 2 sections and Part 2 is one. Please read all requirements
Part 1 (Macro and Microeconomic Concepts in a Global Context) – write 400–600 words
You are a business owner firm that manufactures a specialized product in the United States. While developing a 5-year strategic growth plan, you have decided to investigate the benefits and disadvantages of expanding internationally. Research the issue, and discuss the following:
- How would international expansion affect your business?
- What are the risks, advantages, and disadvantages to your business of international expansion?
- Do you think it is worth it?
- If you were the owner of an automobile company and decided to market internationally, would you face imperfect, monopolistic, oligopolistic, or perfect competition? Please justify your answer.
- What sort of circumstances would you have to be aware of, and why?
- What if you were a major retailer in the United States?
Part 2 – (Costs) – 800 – 1000 words
Suppose that there are two products: clothing and soda. Both Brazil and the United States produce each product. Brazil can produce 100,000 units of clothing per year and 50,000 cans of soda. The United States can produce 65,000 units of clothing per year and 250,000 cans of soda. Assume that costs remain constant. For this example, assume that the production possibility frontier (PPF) is a straight line for each country because no other data points are available or provided. Include a PPF graph for each country in your paper. Chapter 5 of the Suranovic text is a good reference for this task. (https://saylordotorg.github.io/text_international-…)
Complete the following:
- What would be the production possibility frontiers for Brazil and the United States?
- Without trade, the United States produces AND CONSUMES 32,500 units of clothing and 125,000 cans of soda.
- Without trade, Brazil produces AND CONSUMES 50,000 units of clothing and 25,000 cans of soda.
- Denote these points on each COUNTRY’s production possibility frontier.
- Using what you have learned and any independent research you may conduct, which product should each country specialize in, and why?
To assist in your thinking and discussion, additional questions to consider include:
- What is the labor-intensive good?
- What is the Marginal Rate of Transformation impact?
- What is the labor-abundant country?
- What is the capital-abundant country?
- Could trade help reduce poverty in Brazil and other developing countries?