HI5016 International Trade and Enterprise Final Assessment 2023
| Unit Details | Name | International Trade and Enterprise |
| Code | HI5016 | |
| Trimester, Year | Trimester 1, 2023 |
| Assessment Details | Name | Final Assessment |
| Due Date | 17 June, 2023 | |
| Due Time | 12.00 pm | |
| Weight | 50% |
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| Duration | LATE SUBMISSIONS ARE NOT ACCEPTED |
| Answers | must be entered using the answer boxes provided in this paper. DO NOT CUT AND PASTE INTO A NEW DOCUMENT |
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BEFORE ANSWERING THE QUESTIONS IN THIS PAPER, PLEASE READ THE CASE STUDY PROVIDED
Question 1 (7 Marks)
- The top 10 trading partners with the United States of America in 2012 were also the 3 largest European economies: Germany, the United Kingdom, and France. Use the Gravity Model to examine the reasons why the United States of America would not trade more with Guatemala but trades more with distant countries such as Britain and European Union countries mainly Germany and France. 3 marks
ANSWER i: answer boxes will enlarge as you enter your responses
- Carbonated water was teamed with the new syrup to produce a drink that was once “Delicious and Refreshing”, a theme that continues to echo today wherever Coca-Cola is enjoyed. Following the case study provided to you, consider the countries with the highest consumption of Coca Cola. Examine the factors that explain the changing pattern of trade in Coca Cola since 1886. 4 marks
ANSWER ii:
Question 2 (11 marks)
Assume in order to increase the export of Coca Cola produced in Mexico to neighbouring countries the Government of Mexico decided to provide export subsidies to Coca Cola and farmers. Use the figure below to answer the questions that follow.
- Do you think Mexico would benefit after providing export subsidies to farmers and Coca Cola producers? 7 marks
ANSWER i):
- Suppose USA provided export subsidies to Coca Cola producers and farmers. Examine the effects of export subsidies on importing countries. 4 marks
ANSWER ii):
Question 3 (7 Marks)
International trade can be explained by a number of models to explain the benefits of trade for nations. Use the case study provided to you to answer the questions that follow.
- Examine the relevance of the following theories to explain the reasons why Coca Cola and other multinational enterprises trade internationaly.
- Absolute Advantage 2 marks
ANSWER i (a):
- The Ricardian Model 1 mark
ANSWER i (b):
- The Heckscher-Ohlin Model 1 mark
ANSWER i (c):
- Examine the differences between the theory of Absolute Advantage and Comparative advantage. 1 mark
ANSWER ii:
- Explain the main disadvantages of the theory of comparative advantage. 2 marks
ANSWER iii:
Question 4 (7 Marks)
The bulk of Coca Cola employees in USA are Mexican migrants. Explain the effects of migration on both Mexico and USA. Use the figure below and the marginal product of labour concept to explain your answer.
Question 5 (11 marks)
“Despite the competition, internal economies of scale and external economies of scale as well as economies of scope is the secret behind Coca Cola success”. Assume a world of two nations. Also, assume Mexico exports Coca Cola to USA. Answer the questions that follow.
- Examine the source of internal economies of scale and external economies of scale that have facilitated Coca Cola to overcome the intense competition from a diversity of soft drinks across the world. 4 marks
ANSWER i:
- In 2019 data indicated that Mexico was the highest consumer of Coca Cola in the world with a total consumption of 634 8-ounce cups followed by USA that consumed 403 despite being the headquarters of Coca Cola. Use the diagram below to answer the questions that follow.
- Name and explain what you understand by curves A and B. 2 marks
ANSWER ii (a):
- Explain the role of external economies of scale in faciliting cross border trade between Mexico and USA. 5 marks
ANSWER ii (b):
Question 6 (7 Marks)
Examine the benefits of trade negotiation to a firm such as Coca Cola. 3 marks
ANSWER i:
ANSWER ii:
END OF FINAL ASSESSMENT
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