Many reasons for why the United Kingdom voted to leave the European Union have been proposed. A common one is that imports from the EU hurt low-skilled British workers. Suppose that there are two industries, financial services and manufacturing. Further assume that there are two factors of production, low- skilled and high-skilled workers, and that finance is high-skill intensive and manufacturing is low-skill intensive. Further assume that the United Kingdom is abundant in high-skill labour.

a) Show using the Heckscher-Ohlin model of international trade how relative wages for low-skilled and high-skilled workers are determined when the UK is a member of the EU (i.e. when there is free trade between the UK and the rest of the EU). Explain your answer.

b) Now suppose that the UK leaves the EU. For simplicity, we will model this as autarky (i.e. that all trade between the UK and the EU stops). How do real wages of low-skilled and high-skilled workers change (remember that the UK is abundant in high-skilled labour)? Explain your answer.

Perform a comparative analysis of the composition of the items of budget and expenditure over the 15-year period between the two countries ( Netherlands and Malaysia) and comment on how these have changed over the period.

Collect information on the budgets of each of Netherland and Malaysia for the 15 years from 2004 and 2018. You need to collect information on the major components of revenue and expenses with smaller items put into the category “others”. Determine whether the country or federal budget was in surplus or deficit in each of the years.

Briefly explain why education confers positive externality. Depict the market for education where social benefit exceeds private benefit. Explicitly show the equilibrium and socially optimal quantities.

1. Differentiate between Market Segmentation and Product Differentiation  

2. Discuss the five Bases for Segmenting Consumer Markets

Because of corona pandemic, many economies have experienced a decrease in the amount of labor it employs. Use the AD / SRAS model to explain what happens to real GDP? What happens to labor productivity?

Discuss the role of corporate social responsibility and use of corporate power in a democratic society.

4. Let’s say you work as a junior researcher in a consulting company that has been hired by the American milk suppliers association to conduct a study on the milk market. Your assignment is to predict, using the demand and supply analyses, what will happen to the price and quantity (in gallons) traded (bought and sold) under the conditions stated below. What are your predictions? Explain fully using appropriate graphs (sketch). Consider each part separately.     (12 pts)

Note: If you are unable to draw graphs electronically, you can draw them manually and submit a scanned version of your drawings.

          a. The price of comparable imported milk decreases.

   b. Consumer income in the US increases (milk is a normal good).

  c. Drought in the Great Plains reduces the supply of corn.

d. Milk producers now engage in a costly advertising program to encourage milk drinking. Assume that the advertising campaign succeeds in shifting consumer tastes toward drinking milk and that more milk producers enter the market.

e. Farmers that produce milk can choose to produce eggs and price of eggs increases substantially.

f. Improved cattle feed increases milk production. At the same time, new medical reports indicate that drinking milk reduces the risk of bone cancer.

Choose a country or location.

i) Prepare an exhaustive list of positive and negative impacts of globalisation on ageing population in a location of your choice. Note: Part i needs a list!

ii) In 150 words, briefly summarize some challenges of creating a 'healthy public policy', targeted to to address negative impacts of globalisation on the ageing population listed in Part i.

Note: You can choose one or more negative impacts listed in Part i and focus on them for Part ii.

Word limit = Part i is an exhaustive list

Part ii : 150 words

Leonard, a company that manufactures explosion-proof motors, is considering two alternatives for expanding its international export capacity. Option 1 requires equipment purchases of $600,000 now and $500,000 two years from now, with annual M&O costs of $90,000 in years 1 through 10. Option 2 involves subcontracting some of the production at costs of $240,000 per year beginning now through the end of year 10. Neither option will have a significant salvage value. Use a present worth analysis to determine which option is more attractive at the company’s MARR of 16% per year. (Note: Check out the spreadsheet exercises for new options that Leonard has been offered recently.) (using a spreadsheet)

Explain how international institutions such as World Trade Organization (WTO), General Agreement on Tariffs and Trade (GATT), World Bank and IMF provide public goods. Discuss the contributions of these international institutions to the world economy as well as the criticisms against their services and policies.

Regional trade agreements (RTA) were covered in class, where the arguments suggested by the proponents and the opponents of RTA were also discussed. State your personal opinion on RTA focusing on potential benefits and damages for world trade and giving examples.

The market for wool in the economy of Odessa is shown in the table below (note that quantities are given in tonnes per year).

Discuss the statement "No country is abundant in everything." from the perspective of the Heckscher-Ohlin Model.

The data in the table below are for the small country of Xanadu. Assume that the economy is originallly producing combination C.