...Factor of production mobility refers to the ability to move factors of production—labor, capital, or land—out of one production process into another. Factor mobility may involve the movement of factors between firms within an industry, as when one steel plant closes but sells its production equipment to another steel firm. Mobility may involve the movement of factors across industries within a country, as when a worker leaves employment at a textile firm and begins work at an automobile factory. Finally, mobility may involve the movement of factors between countries either within industries or across industries, as when a farm worker migrates to another country or when a factory is moved abroad. The standard assumptions in the trade literature are that factors of production are freely (i.e., without obstruction) and costlessly mobile between firms within an industry and between industries within a country but are immobile between countries. The rationale for the first assumption—that factors are freely mobile within an industry—is perhaps closest to reality. The skills acquired by workers and the productivity of capital are likely to be very similar across firms producing identical or closely substitutable products. Although there would likely be some transition costs incurred, such as search, transportation, and transaction costs, it remains reasonable to assume for simplicity that the transfer is costless. As a result, this assumption is rarely relaxed. The assumption that...
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...SOCIAL STRATIFICATION: INTRODUCTION AND SIGNIFICANCE Social strata are levels of social statuses. Members of a society who possess similar amount of wealth, power, and privileges occupy each social stratum. We can see layers of social statuses occupied by members of society. Organized systems of such strata are conceptualized as social stratification system. Social stratification refers to a system by which a society ranks categories of people in a hierarchy. Four basic principles of stratification: 1. Social stratification is characteristic of society, not simply a reflection of individual differences. Children born into wealth families are more likely than born into poverty to enjoy good health, achieve academically, succeed in their life’s work, and live well into old age. Neither rich nor poor people are responsible for creating social stratification, yet this system shapes the lives of them all. 2. Social stratification persists over generations. In all societies parents pass their social position along to their children, so that patterns of inequality stay much the same from generation to generation. Some individual experience change in their position in the social hierarchy. For most people, social standing remains much the same over a lifetime. 3. Social stratification is universal but variable. Social stratification is found everywhere. At the same time, what is unequal and how unequal people are vary from one society to another. 4. Social stratification involves not...
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...What are the different types of factors of production? Factors of production mean inputs and finished goods mean output. Input decides the quantity of output i.e. output depends upon input. Input is the starting point and output is the end point of production process and such input-output relationship is called as "Production Function". All factors of production like land, labor, capital and entrepreneur are required altogether at a time to produce a commodity. In economics, production means creation or an addition of utility. Factors of production can be classified into four categories. Such as: 1. Land 2. Labour 3. Capital 4. Enterprise Factors of production refer to inputs required for conducting production. Input is the starting point of every production activity. According to Prof. Benham, "Anything that contributes towards output is a factor of production." Mere existence of anything doesn't make it a factor of production but its contribution in production process is a necessary condition. Dr. Alfred Marshall described factors of production as "Agents of Production". Cooperation among factors is essential to produce anything because production is not a job of single factor Four Factors of Production in Economics - Chart Following chart provides brief tabulated information on 4 factors of production. * Mention the features of Land, Labor. * Land:- Land is a Natural and primary factor of Production. Land is not created by mankind...
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...CHAPTER SIX INTERNATIONAL TRADE AND FACTOR MOBILITY THEORY OBJECTIVES • To understand theories of why countries should trade • To comprehend how global efficiency can be increased through free trade • To become familiar with factors affecting countries' trade patterns • To realize why countries' export capabilities are dynamic • To discern why the production factors of labor and capital move internationally • To grasp the relationship between foreign trade and international factor mobility CHAPTER OVERVIEW Chapter Six provides a conceptual foundation for the exploration of the international trade process. First, it examines the basic theories of mercantilism, absolute advantage, and comparative advantage. Then it explores patterns of trade in light of the theories of country size, factor proportions, and country similarity. It also considers the role of distance and explains the relevance of Product Life Cycle Theory and Porter's Diamond of national competitive advantage. The chapter concludes with a discussion of factor mobility and its relationship to the international trade process. CHAPTER OUTLINE OPENING CASE: COSTA RICAN TRADE, FOREIGN INVESTMENT, AND ECONOMIC TRANSFORMATION [See Map 6.1.] Costa Rica, a Central American country of barely 4 million people, has successfully transformed its primarily agricultural economy to one that includes strong technology and tourism sectors as well. Bordering both the Pacific Ocean...
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...course, actual reservoir rock is a much more complicated mixture of particles, and its porosity must be measured directly from core samples or estimated by well log analysis. Figure 3 The proportion and distribution of void space in a reservoir rock can be modified by the processes of cementation, solution, fracturing, and recrystallization. In reservoir engineering, primary porosity refers to the void spaces remaining after the sedimentation of particles into the rock matrix. Secondary porosity is caused by solution channels, fractures, and vugs in the bulk volume of the matrix, and is developed subsequent to the deposition of the rock. Where both types of porosity exist, the system is referred to as a dual porosity system. The production sequence of a dual porosity system may be very different from that of a primary porosity system.Table 1 (below) gives a general range of reservoir rock matrix porosities. Generally, reservoir rock martix porosities in the lower ranges are of commercial interest only when a secondary porosity system is present. Table 1--Rock matrix porosities (after Levorsen, 1967) : Negligible 0-5 Poor 5-10 Fair 10-15 Good 15-20 Very good 20-25+ Usually, the porosity enters into our reservoir calculations in estimating hydrocarbon volume in place in the reservoir. Its fractional value is multiplied by the bulk volume of the reservoir rock, and by the hydrocarbon fluid saturation (equal to one minus the water saturation) to determine the...
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...More specifically, we saw that the specific factor in the sector whose relative price increases will gain, and that the specific factor in the other sector (whose relative price decreases) will lose. We also saw that the welfare changes for the mobile factor are ambiguous. Measuring gains vs. losses would be difficult as welfare is inherently subjective. A better way is to see if those who benefit can compensate others who lose and still be better off. Aggregate gains from trade can be shown as followed: In a country that cannot trade, the output of a good must equal its consumption. If DC is consumption of cloth and DF consumption of food, then in a closed economy, Dc=Qc and Df=Qf With trade the value of consumption still needs to be equal but the mix of goods can be different The left hand side is the level of food imports in the domestic economy which is determined by the relative price of cloth and the economy’s cloth exports. Eq. 4.7 is therefore the budget constraint BC slope: Consuming one less unit of cloth gives you Pc extra which can buy you Pc/Pf units of food. Before trade if an economy produces at a point like 2, after trade it can achieve anything within the shaded region. The set of feasible points are then where the BC is in the shaded area. BC slope: Consuming one less unit of cloth gives you Pc extra which can buy you Pc/Pf units of food. Before trade if an economy produces at a point like 2, after trade it can achieve anything within the shaded...
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...and additional investments. When transport systems are deficient in terms of capacity or reliability, they can have an economic cost such as reduced or missed opportunities. Efficient transportation reduces costs, while inefficient transportation increases costs. The impacts of transportation are not always intended, and can have unforeseen or unintended consequences such as congestion. Transport also carries an important social and environmental load, which cannot be neglected.The added value and employment effects of transport services usually extend beyond employment and added value generated by that activity; indirect effects are salient. For instance, transportation companies purchase a part of their inputs from local suppliers. The production of these inputs generates additional value-added and employment in the local economy. The suppliers in turn purchase goods and services from other local firms. There are further rounds of local re-spending which generate additional value-added and employment. Similarly, households that receive income from employment in transport activities spend some of their income on local goods and services. These purchases result in additional local jobs and added value. Some of the household income from these additional jobs is in turn spent on local goods and services, thereby...
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...Labour as a factor of production Labor as factor of production is any human effort used productively (with an output of goods or services) for which payment is made. Honorary work and work for enjoyment are excluded Special Features of Labour Perish ability - cannot be stored, today's effort cannot be saved for tomorrow; Inseparability from labour - cannot be transferred by owner; Immobility as compared to capital and enterprise; Supply of labour not adjustable in short run (it takes 20 years to produce a worker). Labor as a factor of production: Labor is human recourse of production. Any form of physical or mental effort done to the production of goods and services with a view to earn reward, is called labor e.g. Worker, clerk, teacher, doctor, judge, typist etc. According to Marshall, "Any exertion of mind or body undergone partly or wholly with a view to some good other than the pleasure derived directly from the work is called labor. Characteristics of Labor: These are the characteristics of labor as a factor of production. 1. Labor is Inseparable: Labor is inseparable from the labor himself, because he is the source of his own labor power. 2. Sole of Labor: A laborer cannot be sold but a laborer has to sell, his labor in person. 3. Perishable: The labor of a laborer cannot be stored because it is perishable. 4. Bargaining power: Laborer has a weak bargaining power and he has to accept the wage offered to him. 5. Wastage of...
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...area reduce a range of trade barriers to advance or protect a set of economic goals. The level of integration involved in an economic regionalist project can vary enormously from loose association to a sophisticated, deeply integrated, transnationalized economic space. It is in its political dimension that economic integration differs from the broader idea of regionalism in general. Although economic decisions go directly to the intrinsically political question of resource allocation, an economic region can be deployed as a technocratic tool by the participating government to advance a clearly defined and limited economic agenda without requiring more than minimal political alignment or erosion of formal state sovereignty. The unifying factor in the different forms of economic regionalism is thus the desire by the participating states to use a wider, transnationalized sense of space to advance national economic interests. Forms of economic integration Although there are many different forms of economic integration, perhaps the most convenient way to order the concept is to think of a continuum that ranges from loose association at one end to an almost complete merging of national economies at the other end. Although it is far from a given that positive experiences in the simpler forms of economic integration will lead to a deepening of the process to increasingly integrated shared economic spaces, the more-complex forms incorporate and are founded on the substantive elements...
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... Outline Definition of E-mobility History and Facts Pro‘s and Con‘s of E-vehicles Impact on Germany • Politics • Automobile industry Future Outlook Definition: Definition History & Facts Pro’s & Con’s Impact on Germany Future Outlook Difference: Hybrid car: uses 2 or more power sources (e.g. combustion engine + electric motor) Electric car: powered by only one electric motor Source: http://www.gartner.com/it-glossary/electro-mobility-e-mobility/ “Electric mobility represents the concept of using electric power trains technologies (….) and connected infrastructure to enable electric propulsion of vehicles in order to satisfy the individual needs of being mobile” History: Definition History & Facts Pro’s & Con’s Impact on Germany Future Outlook 1881 “Trouvé Tricycle” (electric) 1927 “Ford T-Model” (gasoline) 2008 Tesla Roadster (E-car) 1997 Toyota Prius (Hybrid) Statistical Facts about E-cars in Germany: Definition History & Facts Pro’s & Con’s Impact on Germany Future Outlook Source: Kraftfahrt-Bundesamt, KBA, 2012 Definition History & Facts Pro’s & Con’s Impact on Germany Future Outlook Cumulative number of new registrations of electric vehicles in Japan, China, Germany and the USA in 2010 and 2011 20.000 18.000 16.000 14.000 12.000 10.000 8.000 6.000 4.000 2.000 0 18.626,00 14.960,00 2.984,00 2.631,00 USA Japan Germany China Source:BMU (National Platform for Electric Mobility), Handelsblatt, 2 October, 2012...
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...the Mexican government’s Auto Decrees between 1962 and 1982. Does the government appear to be motivated by (a) the theory that factor mobility replaces trade or (b) the theory that factor mobility augments trade (or (c) both)? Explain, using evidence from the case. In a Heckscher-Ohlin model the ability of factors to cross national borders in response to factorprice differentials leads to the replacement of trade in goods and the attainment of the same welfare gains as with free trade. When the production process can be divided into parts, foreign investment can lead to increased welfare and augmented trade. The 1962 Auto Decree eliminated imports of cars. This seems to rely upon trade replacement: capital investment in Mexico will yield the same gains as would be available through trade. The 1972 and 1977 Auto Decrees limited imports of car parts by requiring that any import be offset by an export of the same value. This also reflects a belief that limiting imports will encourage foreign investment (and domestic investment) to produce the car parts locally. (So also did the domestic content requirement in the 1983 Auto Decree.) There is also evidence of the trade-augmenting role of foreign investment. The 1977 Auto Decree allows firms to meet their export requirements through the activities of maquiladoras they own: these rely upon dividing the production process into parts and siting some activities in maquiladoras. In these plants, US investments lead to an augmenting of trade...
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...hierarchical arragngement of a large social groups based on their control over basic resources “Life changes” the extent to which individuals have access to important societal resources such as food, clothing, shelter, education and health (102) Stratification systems are described as being closed or open closed: the boundaries between levels in the hierarchies of social stratification are rigid and peoples position are set by ascribed status Open: the boundaries between levels in the hierarchies of social stratification are flexible and may be influenced (positively and negatively) by people’s achieved status Social mobility the movement of individuals or groups from one level in a stratification system to another Intergenerational mobility: the social movement experienced by family members from one generation to the next intragenerational mobility: the social movement of individuals within their own lifetime (203) Slavery: until the 19th century in quebec, ontario, new Brunswick, nova scotia in N.a it consisted of : for life and it was...
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...University Introduction Karl Marx largely criticized capitalism as a production and social construction method. He perceived capitalism as facilitating the relationships between people rather than between people and things (Hughes, 2003). He criticized capitalism because it supports private ownership of the means of production, thus widening the economic statuses between the rich and poor. Capitalism supports a system whereby the rich continues to exploit those with fewer resources to own production methods in the country. This essay seeks to discuss how Karl Marx perceives the modern world by analyzing his theoretical contexts of the issue of capitalism. Discussion Karl Marx perception of capitalism is that it is a tool innovated by the high economic status people, including politicians and successful business people, to control production methods, thus maintaining the status quo (Varul, 2013). The implication of capitalism on the middle and low class people is that they find hard to experience upward mobility in the society because they lack the opportunity to improve their economic statuses in the society. In this context, technology plays a small role in determining production as compared to the ownership of production processes. Financially resourceful people own and control the production processes in ways that give little or no chance for the middle and low class people to experience social mobility. Marxists opinions suggest that historical developments have been characterized...
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...protection of our natural environment is of fundamental importance to the development, manufacture, use and recycling of vehicles and their components. The BMW Group has thus for many years consistently employed methods such as Life Cycle Assessment and Design for Recycling in its decision-making. The application of these holistic philosophies generates results that are often surprising – and decisive. BMW Group research & development The BMW Group Concept: Sustainable Mobility In every corner of the world, individual mobility is an essential requirement for maintaining economic growth and prosperity. As traffic on the road grows steadily, it is imperative that solutions be found which are compatible with the needs of people and the environment. In this context, the BMW Group pursues a holistic approach in its efforts to entirely eliminate or continuously reduce the environmental impact of its products and processes through intelligent technology-based solutions. Key aspects of this strategy are: • Mobility-based research focused on the intelligent networking of various modes of transport • Improving environmental awareness and safety in the transport sector • Encouraging suppliers and partners to adopt the BMW Group guiding principle of sustainable development. • Further integration of the automobile into intelligent communication networks • Creating uniform environmental standards at every BMW Group location around the world • Developing new power train concepts and sustainable...
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...International Business, 14e (Daniels et al.) Chapter 6 International Trade and Factor-Mobility Theory 1) Which of the following is NOT a reason that international trade theory is useful for managers to understand? A) Countries use trade theories to help them decide how to improve their competitive positions, such as improving the quantity and quality of production factors. B) Countries' trade policies affect whether imports are allowed to compete against domestic production, thus affecting where companies need to produce to serve given markets. C) Countries use laissez-faire policies to intervene in the free movement of international trade, thus affecting where companies can produce most efficiently. D) Countries wrestle with the questions and set policies on what, with whom, and how much they should import and export, thus affecting companies' abilities to produce given products efficiently and sell them into given markets. Answer: C Diff: 3 Learning Outcome: Compare and contrast theories of international trade Skill: Concept Objective: 1 2) Why should managers in international business understand international trade theories? A) Countries' trade policies, based on trade theories, influence which products companies might export to given countries. B) The understanding helps managers decide whether their companies should follow laissez-faire management practices. C) The theories help managers decide whether to use large-scale versus small-scale technologies...
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