Precious Metals And Human Resources

Some costs are expensive: freight cost from China, inventory (lead-time increase because of shipping), and quality control (testing shipped products from China in the US require some cost; time and money)

Aluminium is one of the newest metals to be found only discovered in the 19th century with developments in chemistry and electricity. The late discovery compared to other commonly used metals is due to the fact aluminium does not occur naturally in its purest form. Because of this aluminium was very rare making it a precious metal valued more than gold. Nowadays aluminium is the most abundant metal elements on earth consisting of 8% of the earth’s crust. About 41 million tons is smelted each year and therefore is used in a wide range of applications. From auto bodies to food and beverage storage eg: soda cans as well as electrical cables to aircraft skins, aluminium is a very big part of our everyday lives.

1. Country A is extremely efficient in the mining of tin. However, its climate and terrain makes it difficult to produce corn. According to the theory of comparative advantage, Country A should:

As most already know, the Swiss are renowned for their production of high quality chocolates including those of the Toblerone and Lindt brands. “Switzerland has a comparative advantage in the production of chocolate. By spending one hour producing two pounds of chocolate, it gives up producing one pound of cheese, whereas, if it spends that hour producing cheese, it gives up two pounds of chocolate. Thus, the good in which comparative advantage is held is the good that the country produces most efficiently (chocolate). Therefore, if given a choice between producing two goods (or services), a country will make the most efficient use of its resources by producing the good with the lowest opportunity cost, the good in which it holds the comparative advantage, and by trading for the other good.” (Globalization101.org, 2010)

1. Suppose that there are two states that do not trade: Iowa and Nebraska. Each state produces the same two goods: corn and wheat. For Iowa the opportunity cost of producing 1 bushel of wheat is 3 bushels of corn. For Nebraska the opportunity cost of producing 1 bushel of corn is 3 bushels of wheat. Present production is:

As a result, their businesses may have a difficult time competing with those particular products made in China. If they match China’s prices, the domestic businesses may have minimal profit at best. Consumers would benefit from the import surplus due to having more choices in the market and allowing for a lower overhead by buying cheaper electrical machinery products.

5. Country A has 56,000 units of labor and can produce 2 goods, manufactures and food. A’s producers take 7 units of labor to produce one unit of

24. (Price Discrimination) Explain how it may be profitable for South Korean manufacturers to sell new autos at a lower price in the United States than in South Korea, even with transportation costs included

This simply shows the generality that as a product goes through production and is further refined, the time and money that is spent on it increases its price. Because of this the profits of the industry cannot be analyzed because more than 50% of the products are intermediates to be used in another product’s production. To properly asses the state of the industry’s trade would required crossing over to other industries to the point where the product is actually complete and ready for consumer use. This is neither a good or bad thing as it is simply an exchange

This case is similar in many ways to some other cases I studied before on another program. One example is the Spin Master company case, which described their effort to find a Chinese manufacturer to manufacture their latest product. Two things I remember about this case was cost and production capacity. The cost table provided by one the suppliers was questionable, because it showed a much lower figure

Before performing the calculations, I would have thought that a specialist producer of parts, in this case the Japanese company, would, before transport costs are considered, be able to produce the components at a cost less than ourselves. The product is not particularly labor intensive to build. If it was, we would be looking to outsource production to a country with a lower cost of labor. The principle cost of production is materials cost. A specialty producer should be able to purchase materials at a cheaper price than Boeing as they are presumably making more products for other customers. Further, they should already have equipment in place and have a labor force that does not need to go through the leaning curve to become efficient.

Another challenge is that despite the ability to manufacture products cheaper in China, there is a flip side to this situation and that is that sometimes, that “made in America” sign on the back of a product could mean more than the few dollars more it costs to buy that product. Some Americans, in their spirit of patriotism, care more about supporting the American economy than saving a little bit here and there buying products that were manufactured outside of the United States. Balancing the stigma sometimes associated with making a product in a foreign country with the lower costs that usually comes along with that is important in doing business in China as well.

As the world’s 3rd largest economy, India is an important trade and economic partner for the United States(Martin, Akhtar , Kronstadt , Kumar ,Siskin,2014).There are many resources which are traded between India and United States. This trade may be due to differences between in labour productivity, factor abundance or other factors.example of products traded between India and US include precious stones and metals,aircraft and spacecraft parts,machinery,optical instrument and equipment,textiles,mineral fuel and oil and machinery(Singh,Verma,2016).This trade is due to a fact called comparative advantage which means if countries specialise in producing goods where they have a lower opportunity cost then there will be an increase in economic

China exported 5564700 tons of steels to Korea, down 60.10% year on year. The proportion to total steel export volume was 22.62%m down 0.94% compared with 2008 (Cheng, 2009). In 2009, among top 10 countries to which China exported steels, the ranking of Vietnam, India, Thailand and Singapore ascended, compared with 2008. America and United Arab Emirates with sharp rise in the export volume fell to the 4th place and the 9th place in 2009 from the 2nd place and the 5th place in 2008. Indonesia and Iran decreased by 7.89% compared with 2008, due to small year-on-year decline range of export volume (Huan, 2014).

Trade Barriers: High tariffs are still maintained on exported products that compete with domestic industries in China (Office of United States Trade Reprehensive) . China’s tax regulations are into conformance with international standards (Parliament of Australia Senate) . Therefore at present, cut flower exports to China carry a 70 percent import tax, including cost of transport, plus a value-added tax of 17 percent (Richard Tomlinson, 1995) .