Principles of Economic Essay Example | Topics and Well Written Essays - 3500 words

Principles of Economic - Essay Example If both countries are closed economies, i.e., they do not participate in any trade then both countries will produce both goods by allocating half of their resources to each of the goods, tomatoes and clothes in our case. Consider the hypothetical table below: They cannot produce entire amounts of both goods at the same time. However, participating in international trade and specialization can help increase their production possibilities. Since Pakistan is better at cloth production while Germany is better at tomatoes production, Pakistan is said to have an absolute advantage in cloth production and Germany in tomatoes production. Therefore, common sense suggests that each should specialize in the good in which they have an absolute advantage and as a result, each of them would be better off than they were before. This means that Pakistan should produce 400 clothes and no tomatoes and Germany should produce 400 tomatoes and no clothes. Therefore, Pakistan can now import 200 tomatoes from Germany while Germany can import 200 clothes from Pakistan, thereby each of them realizing a gain of 150 from international trade and specialization. Clearly there is a gain from international trade and specialization in the form of increased production possibilities. ... Therefore, Pakistan can now import 200 tomatoes from Germany while Germany can import 200 clothes from Pakistan, thereby each of them realizing a gain of 150 from international trade and specialization. Cloth Tomatoes Total production (without trade) 250 250 Total production (with trade) 400 400 Clearly there is a gain from international trade and specialization in the form of increased production possibilities. However, even when, for instance, Germany has an absolute advantage in the production of both tomatoes and clothes, participating in international trade and specialization can increase its production possibilities and increase world trade. The theory of comparative advantage says that it should specialize in those goods which it can produce with relatively greater efficiency and import the other. However, we must remember that the above was based on two countries and two products only. In the real world, there are many products and countries involved. However, this model can be extended to include any number of countries or products. Other assumptions are also involved such as production costs are constant and there are no restrictions on international trade. In reality, this is not true. Nevertheless, we can conclude that international trade and specialization can increase world trade through the theories of absolute and comparative advantage. Q2 (a) (i) Price of Mangoes - $ / kg Quantity Demanded - 000/kg Quantity supplied-000/kg $6.00 220 400 $5.50 240 360 $5.00 260 320 $4.50 280 280 $4.00 300 240 $3.50 320 200 $3.00 340 160 Equilibrium quantity= 280000

Critique about the reading Essay Example | Topics and Well Written Essays - 500 words

Critique about the reading - Essay Example All the examples are too numerous to name in this critique, but one occurs right on page two. It goes, â€Å"In communication we have a tendency to focus on the information (in media and in the environment) and the sensory systems that gather it abstractly. That is removed from time and space.† The second sentence does not make a very good independent clause. So that the reader does not have to stop and figure this statement out it can simply read, â€Å"...environment), and the sensory systems that gather it abstractly and are removed from time and space. Spell checker could fix a lot of other errors. It is bogged down by several other problems, but its biggest issue can be summed up in a few words: It does not discuss how the points it makes relate to media. This is a huge problem because the reader consumes about two dozen pages of knowledge without learning how statements, largely based in science, tie into media. For example, in the beginning on page 3 in Perceptual Systems the author claims that the reader does not need to get bogged down by overly scientific examples. However, it goes on to break this promise by page four when it delves into visual perception and talks about neurons and ventral and dorsal pathways to the brain. As this scientific jargon flows freely it becomes quite evident to the reader that all these sentences could be summed up as: Our eyes perceive the world around us and make us aware of our world by helping us identify what things are, and where they are. Once it gets whittled down to this simplistic statement the truth becomes obvious -- this is info rmation everyone already knows. Why talk about it? This is still relatively close to the beginning of chapter two, and it starts right here by never tying any of this obvious information into a media related point. Throughout chapter two the writing is also overly wordy, even to the point of seeming geeky at times; as if the writer reveled in knowing the knowledge and simply