Discussion Questions Essay

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Note: Questions from the end of the chapters can also be used for discussion questions
Chapter 2: Foundations of Modern Trade Theory: Comparative Advantage
Critical Thinking and Discussion Questions:
QUESTION 1: Mercantilism is a bankrupt theory that has no place in the modern world. Discuss.

QUESTION 2: Is free trade fair? Discuss.

QUESTION 3: Unions in developed nations often oppose imports from low-wage countries and advocate trade barriers to protect jobs from what they often characterize as “unfair” import competition. Is such competition “unfair”? Do you think that this argument is in the best interests of (a) the unions, (b) the people they represent, and/or (c) the country as a
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What are the arguments for and against taking such a position?

QUESTION 2: Whose interests should be the paramount concern of government trade policy - the interests of producers (businesses and their employees) or those of consumers?

QUESTION 3: Given the arguments relating to the new trade theory and strategic trade policy, what kind of trade policy should business be pressuring government to adopt?

QUESTION 4: You are an employee of an U.S. firm that produces personal computers in Thailand and then exports them to the U.S. and other countries for sale. The personal computers were originally produced in Thailand to take advantage of relatively low labor costs and a skilled workforce. Other possible locations considered at that time were Malaysia and Hong Kong. The U.S. government decides to impose punitive 100% ad valorem tariffs on imports of computers from Thailand to punish the country for administrative trade barriers that restrict U.S. exports to Thailand. How do you think your firm should respond? What does this tell you about the use of targeted trade barriers?

Chapter 7: Trade policies for the Developing Nations
Critical Thinking and Discussion Questions:
QUESTION 1: Free market economies stimulate greater economic growth, whereas

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