Download 527755170-ECO121-Test01-Fall2021-Le-Hoằng-Anh-HE153555

ECO121 Macroeconomics
Class: MKT 1608
Term: Fall2021
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Lê HOẰNG ANH
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HE153555
MKT 1608
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Individual Assignment 01
Question1. (2 points)
a. What is defined as absolute advantage?
- Absolute advantage is the ability of an individual, company, region, or country
to produce a greater quantity of a good or service with the same quantity of inputs per unit
of time, or to produce the same quantity of a good or service per unit of time using a lesser
quantity of inputs, than another entity that produces.
b. What is defined as comparative advantage?
- Comparative advantage is an economy's ability to produce a particular good or
service at a lower opportunity cost than its trading partners. A comparative advantage gives
a company the ability to sell goods and services at a lower price than its competitors and
realize stronger sales margins.
c. Case 1: Output approach
Two commodities and two countries
Given the resources, Singapore and Malaysia can produce the following products –
television sets and cars (see Table 01)
Countries
Singapore
Malaysia
TV sets
100
60
Cars (units)
50
40
Table 01
+ Which country has the absolute advantage in the production of both TV sets and
Cars over the other?
- Singapore has the absolute advantage in the production of both TV sets and
Cars over Malaysia because given the same resources, Singapore can produces more
than Malaysia
+ Which country has the comparative advantage either in the production of TV sets
or in the production of Cars over the other?
- Malaysia has the comparative advantage in the production of Cars.
d. Case 2: Input approach
Two commodities and two countries
Give the resources, America and England can produce one unit for both Steel and
Coal in terms of number of working hours shown as follows:
Countries
One unit of Steel
One unit of Coal
required
required
America
80 man-hours
90 man-hours
England
120 man-hours
100 man-hours
Table 02
+ Which country should specialize in the production of Steel?
- America
+ Which country should specialize in the production of Coal?
- England
e. Case 3: Input approach
Two countries but multiple commodities
The following Table 03 shows the numbers of man – days taken to produce an
equivalent amount of six commodities in each of the two countries – Switzerland
and Sweden.
Countries
Coal
Cotton
Wool
Iron
Wheat
Maize
Switzerland
120
60
70
100
140
80
Sweden
100
25
35
90
90
20
Table 03
+ Assuming that there are no other costs of production. Which two commodities is
Sweden most likely to import from Switzerland?
- Coal
- Wheat
Question 2 (2 points):
Given the following annual information about a hypothetical country, answer the following questions
(Expenditure Approach to GDP)
Personal consumption expenditures
Personal taxes
Exports
Depreciation
Government purchases
Gross private domestic investment
Imports
Government transfer payments
Billions of Dollars
$200
50
30
10
50
40
40
20
a. What is the value of GDP?
- The value of GDP or the Gross Domestic Product will be calculate
by C+I+G+NXC+I+G+NX.
GDP=200+40+50+(30−40)GDP=200+40+50+(30−40)
GDP=$280
b.
What is the value of net domestic product?
- The Net Domestic Product (NDP) can be calculated as follows:
280−10=$270
c.
What is the value of net investment?
- The net investment can be calculated as follows:
40−10=$30
d.
What is the value of net exports ?
- The value of net exports can be calculated as follows:
30−40=$−10
Question 3 (2 points):
Given the following annual data, answer the following questions;
New residential construction
Purchases of existing homes
Sales value of newly issued stocks and bonds
New physical capital
Depreciation
Household purchases of new furniture
Net change in firms’ inventories
Production of new intermediate goods
Billions of Dollars
$500
250
600
800
200
50
100
700
a. What is the value of gross private domestic investment?
- 1700
b. What is the value of net investment?
- 1500
c. Are any intermediate goods included in the measure of gross investment?
- No intermediate goods can’t be counted in gross investment .
Question 4 (2 points)
Refer to the information provided in Table 6.1 below to answer the questions that follow.
a. Personal consumption expenditures in billions of dollars are
- 1650
b. The value for gross private domestic investment in billions of dollars is
- 325
c. The value for net exports in billions of dollars is
- 350
d. The value of gross domestic product in billions of dollars is
- 2875
e. The value of government spending in billions of dollar
- 550
Question 5. (2 points)
+ What are the benefits/gains from international trade ?
+ What are the disadvantages of international trade?
International trade is considered an economic process and is considered an economic
sector. With the agency of the development process, economics is understood as the
economic and trade process carried out from the macro to the micro to the operating and
development fields of international trade, distribution and storage. information. Information
about goods, consumption, cultural characteristics of regional addresses, etc. takes place on a
larger scale and at a faster speed. International trade economy is a highly specialized field,
organized, analyzed, cooperated in the transfer of technology, labor, infrastructure,
investment capital and goods production organization.
International trade is beneficial to participating countries because participating countries have
the ability to distribute and develop a wide trading market and produce in larger quantities,
developing a variety of goods over quality. Compared to the general trend of consumers, but
fierce competition in the international market.
International trade contributes to promoting countries participating in the development of
goods and technologies to increase competition, improve product quality to survive in the
international market, it directly affects producers. . export. output in the country participating
in the international trade market, from which the enterprise can promote the strength of the
market function and the ability of the country in which the enterprise is doing business.
Participating enterprises can host, exchange labor, science and technology through labor
cooperation and technology transfer, which is the process of developing technology and labor
qualifications of employees. In addition, international trade in the development process
promotes closer and more open economic linkages between market participants, helping to
stabilize the economic situation - the main value of participating countries. family.
international commerce. cell family.
International trade increases people's living standards, creates more jobs and increases
productivity in the economy, contributes to economic stability, in addition, international trade
contributes to increase investment capital. , expanding international relations.
Here are some disadvantages of international trade:
- Tax and Customs disadvantages of International Shipping. International shipping
companies make it easy to ship packages to almost anywhere in the world.
- Language barriers.
- Different cultures.
- Customer service.
- Return Products.
- Theft of intellectual property.
The benefits of international trade will allow Vietnam's economic development to
continue shifting from exports of low-tech manufactured products and primary goods to more
sophisticated high-tech goods such as electronic. , machinery, vehicles and medical
equipment.
This can be done in two ways - first, through more diversified sourcing partners through
larger trade networks and cheaper import of intermediate goods from partner countries,
which This will promote the competitiveness of Vietnam's exports.
Second - through partnerships with foreign companies, it is possible to transfer the
knowledge and technology needed to make the leap into higher value-added manufacturing.
An example of this is the recently launched VSmart phone manufactured by Vietnam's
Vingroup.
Vietnam is touted as a low-cost manufacturer with some companies like Samsung and Nokia
setting up shop to make and then export electronics, but the latest example shows that
Vietnam can develop itself. product. from the transfer of know-how technology.
Such sophisticated technology and business practices will help increase Vietnam's labor
productivity and expand the country's export capabilities.