Explain Porter’s theory on international trade

• The minimum amount of words to be used is 2000 and the maximm is 2500
• You may want to include graphics to make your reasoning and argumention more visual and explicative
• Font: Arial. Size: 12,5pts. Line spacing: 1,5. Text align: Justified.
• The in-text References and the Bibliography have to be in Harvard’s citation style.
Questions:
1. (20%) Explain Porter’s theory on international trade and apply it to compare two companies of different countries.
2. (20%) Use the information in the table below to answer the following questions.
Production per unit of Labour:
US France
Clothing 400 500
Autos 200 300
(a) Does either country have an absolute advantage in the production of clothing or autos? Explain.
(b) What is the opportunity cost of autos in each country?
(c) What is the opportunity cost of clothing in each country?
(d) Analyze comparative advantage and opportunities for trade between the U.S. and France.
3. (20%) Explain the main arguments for governments to protect domestic industry.
4. (20%) Explain the role of the International Monetary Found on international investment. What does most favoured nation (MFN) mean?
5. (20%) Read the following text and answer the question below
“The golden age of globalisation, in 1990-2010, was something to behold. Commerce soared as the cost of shifting goods in ships and planes fell, phone calls got cheaper, tariffs were cut and the financial system liberalised. International activity went gangbusters, as firms set up around the world, investors roamed and consumers shopped in supermarkets with enough choice to impress Phileas Fogg.
Globalisation has slowed from light speed to a snail’s pace in the past decade for several reasons. The cost of moving goods has stopped falling. Multinational firms have found that global sprawl burns money and that local rivals often eat them alive. Activity is shifting towards services, which are harder to sell across borders: scissors can be exported in 20ft-containers, hair stylists cannot. And Chinese manufacturing has become more self-reliant, so needs to import fewer parts.”
From the article “Slowbalisation”. The Economist, Jan 24th 2019.
a) Describe the main features and drivers of globalization and compare the “golden age of globalization” to the process of slowbalization.
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This task assesses the following learning outcomes:
• develop a complex understanding of the main concepts of international economics and how to apply them;
• understand and analyze the different global economic theories;
• distinguish between the different international economic systems;
• understand balance of payments and its influencers;
• explore economic integration in different economic areas