International Marketing Group Assignment
1. Application
2. Product life Cycle
- Technological innovation
- a. new methods of producing existing commodities
b. production of new commodities
c. commodity improvement
1. Manufactured good is introduced to home market - start produce something, operate close to local market, production is small.
2. Domestic industry shows export strength - expand production
3. Foreign production begins - more efficient production (using low wage labor & mass production)
4. Domestic industry loses competitive advantage
5. Import competition begin
3. Comparative Advantage
- Mutually beneficial trade can occur whether or not countries have any absolute advantage
- Emphasized cost (relative) differences
- The world consists of two nations (each using single input to produce two commodities)
- In each nation, labor is the only input (Fixed Endowment of labor, Labor is employed and homogenous)
- Labor can move freely among industries
- Technology (fixed for both)
- Cost do not vary with the level of production
- Transportation costs are zero
- Free trade occur between nation
4. Absolute Advantage
- uses less labor to produce one unit of output.
Principle of absolute advantage
- two nation, two-product world
-import good if absolute disadvantage, export good if absolute advantage
5. Factor endowment
- Heckscher- Ohlin theory
- Immediate basis for trade : the difference between pre- trade relative product prices of trading nations.
- Price depend on the production possibilities curves and tastes and preferences in trading countries.
- production possibilities curves depend on technology and resource endowments
-determinants of comparative advantage : technology, resource endowment, demand
- resource endowment ratio - determine comparative advantage (capital/ labor)
- export the product that uses a large amount of its relative abundant resource.
- import the product which in production uses the relatively scarce resource.
- Differences
2. Product life Cycle
- Technological innovation
- a. new methods of producing existing commodities
b. production of new commodities
c. commodity improvement
1. Manufactured good is introduced to home market - start produce something, operate close to local market, production is small.
2. Domestic industry shows export strength - expand production
3. Foreign production begins - more efficient production (using low wage labor & mass production)
4. Domestic industry loses competitive advantage
5. Import competition begin
3. Comparative Advantage
- Mutually beneficial trade can occur whether or not countries have any absolute advantage
- Emphasized cost (relative) differences
- The world consists of two nations (each using single input to produce two commodities)
- In each nation, labor is the only input (Fixed Endowment of labor, Labor is employed and homogenous)
- Labor can move freely among industries
- Technology (fixed for both)
- Cost do not vary with the level of production
- Transportation costs are zero
- Free trade occur between nation
4. Absolute Advantage
- uses less labor to produce one unit of output.
Principle of absolute advantage
- two nation, two-product world
-import good if absolute disadvantage, export good if absolute advantage
5. Factor endowment
- Heckscher- Ohlin theory
- Immediate basis for trade : the difference between pre- trade relative product prices of trading nations.
- Price depend on the production possibilities curves and tastes and preferences in trading countries.
- production possibilities curves depend on technology and resource endowments
-determinants of comparative advantage : technology, resource endowment, demand
- resource endowment ratio - determine comparative advantage (capital/ labor)
- export the product that uses a large amount of its relative abundant resource.
- import the product which in production uses the relatively scarce resource.
- Differences