International Trade Final Exam Study Guide – Dec. 2012
Basics:
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Will cover Ch 7 – 12 in old text and ExIm information.
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Approx. 1:15 or so in length
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Combo of multiple choice, short answer, problems, etc.
High level material that may be on the test….note: material not listed here could be on the test.
This is not necessarily a complete list.
Also, the below outline is based on the NEW (9th) edition of
the book.
Ch 7 – External Economies of Scale and Intl. Location of Production
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Economies of scale
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Definition and differences between external and internal
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External economies of scale – factors of efficiency, market equilibrium and forward
falling supply curves
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How work with export and trade patterns
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Dynamic increasing returns
Ch 8 - Firms in the Global Economy: Export Decisions, Outsourcing and MNEs
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Imperfect Competition
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What?
Monopoly/Oligopoly vs. monopolistic competition (no much on this but at least
know the differences – understand the basics)
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Includes….market size, trade costs,
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Intra-industry trade – define, example
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MNEs
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What?
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FDI
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FDI meaning / impact
Why?
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– horizontal vs. vertical – what, pros/cons
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Also, multinational firm role
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Outsourcing and consequences
Ch 9 – Instruments of Trade Policy
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Tariffs
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Specific / Ad valorem – what, how used
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Effects on home/foreign/world demand and supply curves
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Effective rate of protection – define, calculate, what does it mean?
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Costs / benefits of a tariff – who, measuring,
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Terms of trade – what is this…gains/losses
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Calculations…basics as defined and limited by what I put on the board
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Small vs. large country issues
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Export subsidies – Define, basics
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Import quotas – define, basics
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Voluntary export restraints – define, basics
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Local content req.s – define, basics
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Tariffs vs. other barriers – define and compare/contrast basics, effects, etc.
Ch 10 – Political Economy of Trade Policy
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Case for free trade
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Efficiency – define, other
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Politics – what
Anti trade case
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National welfare
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Terms of trade
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Optimal tariffs
Market failure and benefit – define and identify
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Theory of 2nd best
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***Examples…
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Be ready and able to argue either side…
Trade policy - basics
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Electoral competition / Collective action
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Political process and protection
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Intl organizations
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GATT / WTO – basic info
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Preferential trading agreements – free trade area/customs unions – basics
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Ch 11 – Trade Policy in Developing Countries
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Import Substituting Industrialization – what?
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Infant industry – pro/con
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Market failure – pro/con
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Have the above worked? Why/not?
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Trade liberalization
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Export Orientation
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Why asia?
Other factors in growth?
Ch 12 – Controversies in Trade Policy
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Externalities – define, relevant examples,
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What industries is the above applied to?
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Strategic Trade Policy
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Brander-Spencer Analysis
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This work? How?
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Beggar thy neighbor…
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Why? When? Etc.
Anti-globalization - basics
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General movement – basic issues
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Wages – issue or no?
ExIm
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Exim players
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Basic processes
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Considerations for deciding product / country
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Shipping – basic docs, nec., etc.
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Financial – types of payment
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Learnings from guest speakers