As the time horizon increases, variable costs rely less on existing factors and restrictions and therefore will begin behaving differently which will in turn affect the cost of production (Wright, 2007). The second way a firm that’s into profit maximization can decide its greatest level of output is by way of the marginal revenue -- marginal cost method. This is done by subtracting the marginal cost from the marginal revenue that a product generates. Using marginal cost and marginal revenue as the bases, profit maximization will be obtained at the point when marginal revenue is equal to marginal cost. If the marginal revenue is greater than marginal cost this would be when a profit maximizing firm would need to increase production until marginal revenue is equal to marginal cost.
et powerECO204: Homework Assignment 3 1. True, False, Uncertain a. A firm that enjoys economic rents earns higher economic profits than other firms without the economic rents. b. Relative to the perfectly competitive equilibrium, the equilibrium outcome for a market dominated by a monopsonist will be higher prices and lower levels of good demanded.
The more common and economically orientated explanation for country’s differing attitudes towards international trade is that certain countries gain or loose from trade in certain international markets. Most gains and losses of countries in international trade can be explained by looking at the differing factor endowments of countries. The basic principle of factor endowments in relation to international trade is that a country or group within a country that is trading a resource that is locally abundant to them in relation to the international market will gain from international trade as they do not have the burden of scarcity that other countries will have in relation to them. (Frieden, M. and Lake, D. 2000 p.318) This allows them essentially to behave as an economy of scale within that international market and therefore gain like any other economy of scale might. The inverse is true for countries or groups within countries that are trading a resource that is locally scarce to them in relation to the international market.
Another influence is what they hold in a current account could be considered a deficit which means the country is spending more on foreign trade than it is receiving. This creates a supply of their own currency than a demand for its products. According to our text, Mankiw, (2007) 1. Consumers are wealthier, which stimulates the demand for consumption goods. 2.
Argument against trade protection Argument against trade protection, in another word calls it as argument for trade restriction which support for the free trade. Free trade occur when government do not attempt to restrict what its citizen can buy from another country or what they can sell to another country. With the free trade, each nation can specialization in production which they have comparative advantage than other country, and trade with other country exchange the production which they cannot produces in home nation or other country have comparative advantages in those production than us. Over the long run, each nation can more efficiency in production which spending lower prices to produce higher levels of output; Get more income, revenue and profit as increase the market place, and increase in the consumption or demand (consumer can buy their like or product at the lower price). A country can be a capital (or labor)-abundant nations and labor (or capital)-scarce nations which consider their comparative advantage in technologies, input productivity, and wages of labor.
May 20-21. We might pay your flight! www.nyenrode.nl/imba Many firms strive for a competitive advantage, but few truly understand what it is or how to achieve and keep it. A competitive advantage can be gained by offering the consumer a greater value than the competitors, such as by offering lower prices or providing quality services or other benefits that justify a higher price. The strongest competitive advantage is a strategy that that cannot be imitated by other companies.
This is shown by how there GDP is high, and the very large population. Productivity in China has also significantly increased in the last few decades. There are many different natural resources that can be found on China for example: coal, iron ore, petroleum, natural gas, mercury, tin, tungsten, antimony, manganese, molybdenum, vanadium, magnetite, aluminium, lead, zinc, uranium, hydropower potential (world's largest). China can make huge amounts of money by selling its natural resources to other countries where they may not be able to extract these resources from their own country. In 2006, out of all the consumer electrics in the world, 80% was exported from China.
Problems of population growth in China Nowadays, China develops at full speed, and really becomes stronger and stronger. However, it also brings lots of problems that cannot easily be dealt with. Michael. K said “As the world's population surpassed 6 billion in October 1999, China's population represented more than 1/5 of this total (20.8%) — one out of every five people in the world lives in China. Today, China's population exceeds 14 billion, a number that continues to increase minute-by-minute on Beijing's official.”(2009) Unstoppable population growth has become a huge problem in China that we need to solve.
Chinese goods flood global markets. These include living goods, toys, electronic product, clothing etc. a large percentage of products are made in China. China has kept the role of number one of exporters in the world and accumulated a great amount of wealth. China has $1900 billion currency reserve in the foreign markets.
Beijing city is the country’s capital. It is the centre of administration and its major business hub. Politically, a single party known as the Communist Party of China governs the country. China has risen economically in the past few years to become the second largest economies in the world. The United States of America is the world’s leading g economy.