International trade, Strategic Management

Suppose that the small country of Fiji is isolated from the rest of the world and no international trade occurs due to prohibitively high transportation costs. Amongst other things, Fijians produce and consume coconuts and material (for making clothes) in perfectly competitive markets.
 
(a)  Illustrate the equilibrium autarky price and quantity of coconuts and material and the associated consumer and producer surpluses.   Suppose that transportation costs fall dramatically and that international trade is now commercially viable and that the Fijian government does not implement any trade restricting policies.  

(b)  Suppose that, the world price of coconuts (adjusted for the reduced transportation costs) is significantly higher than Fiji's autarky price.  Illustrate the new competitive equilibrium in Fiji's coconut market and identify: any exports or imports of coconuts; the new consumer and producer surpluses and the gains from international trade.  How would your answer change if Fiji produced a significant proportion of the world's coconuts (i.e. it was not "small" in this market)? 

(c)  Suppose that, the world price of material (adjusted for the reduced transportation costs) is significantly lower than Fiji's autarky price of material.  Illustrate the new competitive equilibrium in Fiji's material market and identify: any exports or imports of materials; the new consumer and producer surpluses and the gains from international trade.  

(d) Within Fiji, who gains and who losses from international trade in coconuts and materials and by how much?  (Refer to your charts in parts (b) and (c)).

Posted Date: 2/19/2013 3:02:34 AM | Location : United States







Related Discussions:- International trade, Assignment Help, Ask Question on International trade, Get Answer, Expert's Help, International trade Discussions

Write discussion on International trade
Your posts are moderated
Related Questions
What Is Strategy & Why Strategy Is Important? Managers at all companies facade three innermost questions in view strategically concerning their companies' current circumstances

Have you ever been involved in an effort to introduce a new product, service or technology in an organization? If so, share your experiences with the class. Provide the class wi


Q. illustrate about Return on capital employed? Return on capital employed (ROCE)       =    (Profit before interest and tax (PBIT) / Capital employed) x 100%       RO

EIGHT STAGE PROCESS

Question Sarah and John are both working for a software development company. The manager of the new product division was originally the leader of the project team for whi

I need a project and summary of Nano Manufacturing papers, please let me know how much cost it is? i need paper for my final year exam. I would like to finish my Nano Manufacturing

#questatra is the world''s third oldest car company, and produced a number of rather advanced streamlined cars during the course of its production run. Because spare parts and manu

1. The development of the mass media has been shaped in fundamental ways by the fact that they have often been profit-driven. The commercial or capitalist context of media is evide

I need a five year plan with cost estimates and a time line also net present values at 10% discount rate