Welcome to EC 382 International Economics By Dr Jacqueline Khorassani Study Guide Week Five Note You must go over these slides and complete every task outlined here before Wednesday October 3 1 Remember that Exam 1 is scheduled for Wednesday October 10th at 3 10 PM It will cover everything we discuss in class until that time 2 International Labor Movement How much of it is going on What are the reasons for it Pull push factors What are the effects of it In the source country In the host country What does Figure 5 2 show The role of government What is brain drain 3 Alternative to labor movement How do offshore assembly provisions work What is Outsourcing Examples 4 The Multinational Corporation What is it Different types What are the reasons for it OLI approach How does licensing agreement work Examples What is the role of government Different types of treatments Tax consequences What is transfer pricing 5 Chapter 6 What is a tariff What are the reasons for it What are the types of tariff What are different methods of valuing imports What is consumer surplus How is it measured What is producer surplus How is it measured 6 How does a free trade affect consumer surplus and producer surplus In exporting nation In importing nation 7 What are the economic effects of tariffs 1 The case of small importing nation Effects on Domestic price Quantity sold Quantity of domestic production Consumer surplus Producer surplus Efficiency in production Redistribution of welfare Dead weight loss Tariff revenue 8 What are the economic effects of tariffs 2 The Effects of a tariff for a Large Country Domestic price export price the loss of consumer surplus the gain of welfare through the terms of trade effect 9 The Effective Rate of Protection What is it How is it calculated 10 What are the arguments for tariffs 1 Infant Government Argument subsidies 2 National Defense Argument 3 Loss of jobs Argument 11