How Does Demand Reversal Invalidates the Theory of Hecksher-Ohlin Theorem - Free Essay Example

Sample details Pages: 4 Words: 1190 Downloads: 8 Date added: 2017/09/16 Category Advertising Essay Did you like this example? The modern theory of international trade Figure 1. 1 DEMAND REVERSAL Country A produces at point A, specializing in the production of steel, it consumes at point D, given the utility pattern represented by the indifference curve (IC a). This means that country A exports EA amount and import ED amount of steel. Therefore country A which is a capital surplus country is exporting labour intensive goods (cloth) and importing capital intensive goods (steel). This is in direct conflict with the HECKSCHER OHLIN prediction concerning the commodity structure of trade. Likewise, country B specializes in the production of cloth, but it consumes at point G in response to its utility pattern represented by the indifference (IC b). Therefore it exports BF amount of steel and imports FG amount of cloth. Once again we notice that country B, which is a labour surplus country exports capital intensive goods (steel) and imports labour intensive goods (cloth). The HECKSCHER OHLIN prediction is overturned. In this case, represented in figure 1. 1 we have a situation of what is called demand reversal. Don’t waste time! Our writers will create an original "How Does Demand Reversal Invalidates the Theory of Hecksher-Ohlin Theorem" essay for you Create order Here not only the two biases-consumption and production are in the same direction but also the consumption bias more than offsets the production bias. Consumption point D lies to the left of production point A in country A and in country B the consumption point G lies to the right of production point B. When such a demand reversal takes place, the capital surplus country would export labour intensive goods. The HECKSCHER OHLIN theory would then be invalidated by the demand reversal Critical evaluation of the HECKSCHER OHLIN theorem In the area of pure theory of international trade, the HECKSCHER OHLIN model occupies a very prestigious position. The very fact that many known Economists like Leontief, Walters, Minhas and others have tried to test the empirical validity of the HECKSCHER OHLIN theorem using econometric models, stands as a testimony of the prestige of the model. The HECKSCHER OHLIN theorem has been criticised mainly along the following lines: the factor intensity reversal, Leontief and paradox and demand reversal argument Factor intensity argument The HECKSCHER OHLIN theorem was based on the assumption that the production unctions are different for different goods but they are identical for each good in two countries. This, in other words means that one good is capital intensive and the other good is labour intensive, but the same good which is capital intensive in one country, must be capital intensive in the other country also and the labour intensive good remains labour intensive in both the coun tries. This assumption is guaranteed when both the two production isoquants for capital intensive and labour intensive cut each other only once but not more than once in diagram 1 this is shown to happen at point Q. The demonstration in diagram 1 is consistant with the HECKSCHER OHLIN assumption of non-reversability of factor intensities. If factor intensity reversal takes place, then two isoquants will cut each other more than once and the HECKSCHER OHLIN theorem would turn out to be invalid this case is demonstrated in the following diagram. The two production isoquants for steel and cloth cut each other twice in the succeeding diagram: once at point A and the second time at point B. The factor price ratios in country A(capital surplus country) are represented by the parallel lines P 0 P 0. P 1 P 1 represent the factor price ratios in country B(Labour surplus country). In the above diagram note the following factors: in country A steel is labour intensive. In order to produce one unit of either steel or cloth, country A has to use the same amount of capital but more labour for steel than cloth. Cloth has a higher capital-labour ratio and steel has a lower capital-labour ratio. Therefore, a capital rich country like country A would specialize in the production and export of the capital intensive goods, which is cloth. It would import steel which is a labour intensive good. In Country B, cloth is a labour intensive good and steel is a capital intensive good. Because, to produce one unit of cloth it takes a given amount of labour and smaller amount of capital as compared to steel. Steel takes the same amount of labour but more capital per unit of output. In country B, therefore, steel has a higher capital –labour ratio than in cloth. Naturally country B (labour surplus country), would choose to specialize in the production and exports of the labour intensive goods, cloth. Country B therefore would export cloth and import steel which is capital intensive. In this case of factor intensity reversal, as we say above both the countries produce and export the same commodity i. e. cloth. In the capital rich country (country A) it is a capital intensive product and in the labour rich country (country B) it is a labour intensive product. That means the same product (cloth) is capital intensive in one country but less intensive in another country. The same thing applies to steel as well. Steel is labour intensive product in the capital rich country (country B). This is a situation of a factor intensity reversal. When this takes place, both countries end up producing and exporting the same commodities (cloth) and importing the other commodity (steel). This would invalidate the Heckscher Ohlin prediction regarding the structure of commodity trade. In the above diagram the two isoquants cut each other more than once, suggesting factory intensity reversal to the left of point A and to the right of point B. For factor intensities to reverse themselves, it is not, however necessary that the two isoquants cut each other more than once. Leontief and paradox The first comprehensive and detailed examination of the Heckscher Ohlin theorem was the one undertaken by Leontief. You will recall that the theory of factor proportions predicted that the capital abundant country exported capital intensive goods and imported labour intensive goods, and the labour surplus country did the opposite. It is commonly agreed that the USA is a capital rich and labour scarce country. Therefore one would expect exports to consist of capital intensive goods and imports to consist of labour intensive goods. Leontief made an extensively study of the USA and the results were startling, in contrast to what the Heckscher Ohlin theory predicted, Leontief`s study showed that the USA exports consisted of labour intensive goods and imports consisted of capital intensive goods. In Leontief`s own words† Americas participation in division of labour in international trade is based on its specialization in labour intensive rather than capital intensive lines of production. In other words the country resorts to foreign trade in order to economize its capital and dispose its surplus labour rather than vice versa. Leontief`s findings are summarized in the following table Exportsimports Capital in US $ in 1947 prices2. 550. 7803. 091. 339 Labour (man years)1. 80. 3131. 70. 004 Capital-labour ratio( US $ per man hour)13. 91118. 185 From the above table, it is obvious that the US exports had a lower capital-labour ratio that these are import replacement produced in the US as opposed to the actually imported goods of the country. Leontief`s paradox results stimulated similar studies for other countries

Why Dont Young People Read the News

Why are young people not interested in the news? Mark Bauerlein thinks he knows. Bauerlein is an Emory University English professor and author of the book The Dumbest Generation. This provocatively titled tome charts how young people arent interested in reading or learning period, whether its to scan news headlines or to crack open The Canterbury Tales. Statistics Show a Lack of Knowledge Bauerleins argument is borne out by statistics, and the numbers are grim. A Pew Research Center survey found that people age 18-34 are consistently less knowledgeable about current events than their elders. On a current events quiz, young adults averaged 5.9 correct answers out of 12 questions, fewer than the averages for Americans ages 35 to 49 (7.8) and above age 50 (8.4). The survey found that the knowledge gap was widest on foreign affairs. Only about half (52 percent) of those younger than 35 knew that Pakistan and Afghanistan share a border, compared with 71 percent of those ages 35 to 49, and 80 percent of those 50 and older. Distracted by Social Media Bauerlein says young people are in the thrall of Facebook, texting and other digital distractions that keep them from learning about anything more meaningful than, say, who went with whom to the school dance. What do 15-year-olds care about? They care about what all the other 15-year-olds are doing, Bauerlein says. Anything that puts them in touch with one another theyre going to use. Now when little Billy acts up and his parents say go to your room, Billy goes to his room and hes got the laptop, the video game console, everything. Kids can conduct their social life anywhere, he adds. And when it comes to the news, Who cares about some guys over in England jockeying over whos going to run the government there when kids can talk about what happened at the party last weekend? Bauerlein hastens to add that hes not a Luddite. But he says the digital age has changed something fundamental about the family structure, and the result is that young people are less closely under the guidance of adults than ever before. Now they can tune out adult voices all the way through adolescence, he says. This has never happened before in human history. Left unchecked, these developments could result in a new age dark of ignorance, Bauerlein warns, or as a blurb for his book puts it, Sacrificing our future to the least curious and intellectual generation in national history. How to Encourage Interest in the News Change must come from parents and teachers, Bauerlein says. Parents have to learn to be more vigilant, he says. Its amazing how many parents dont even know their kids have a Facebook account. They dont know how intense the media environment is for a 13-year-old. You need to disconnect kids from each other for some critical hours of the day, he adds. You need a critical balance where you are exposing kids to realities that transcend their world. And if that doesnt work, Bauerlein advises trying self-interest. I give speeches to 18-year-old boys who dont read the paper and I say, Youre in college and just met the girl of your dreams. She takes you home to meet her parents. Over the dinner table, her father says something about Ronald Reagan, and you dont know who he was. Guess what? You just went down in their estimation and probably in your girlfriends estimation as well. Is that what you want? Bauerlein tells students that reading the paper gives you more breadth of knowledge. it means you can say something about the First Amendment. It means you know what the Supreme Court  is. I tell them, If you dont read the paper youre less of a citizen. If you dont read a paper youre not a good American. Source Bauerlein, Mark. The Dumbest Generation: How the Digital Age Stupefies Young Americans and Jeopardizes Our Future (Or, Dont Trust Anyone Under 30). Paperback, First Edition edition, TarcherPerigee, May 14, 2009.

How Did Ancient Greece Influence Western Civilization

The Western world was highly influenced by the ancient Greeks. The Greeks changed the way the world looks at art, math, architecture, philosophy, sports, and drama. Without the ancient Greeks, the modern world would not be the same. Men such as Socrates, Plato, and Aristotle changed the way we look at philosophy. The Athenians created the first known democracy, setting the stage for future governments. The Euclidian Theorem and the Pythagorean Theorem among others made mathematics easier and more developed. Even current architecture can be traced back to the Parthenon and other pieces of Greek architecture. The Olympics even started in ancient Greece, creating one of the finest traditions the world has ever known. Without the ancient†¦show more content†¦2). This method of thinking led to the beginning of the scientific method. The scientific method is finding a question, making a hypothesis, conducting an experiment, analyze your data, and make a conclusion based on your ex periment. Without ancient Greek philosophers, we would have a different outlook on life. Another important contribution of the ancient Greeks to the modern world is art. In the United States, the Supreme Court, White House, and the Capitol Building are all highly influenced by Greek architecture. Most of the post offices are modeled after the Parthenon. The Parthenon is on top of the Acropolis in Athens, it is known for their grand marble flooring and columns, the Parthenon was a place of worship to the god Athena (doc. 7). Athena is the Greek goddess of wisdom and military victory, the city of Athens was named in her honor. The Parthenon is a symbol for ancient Greece, allowing for a backdrop of one of the most important cities when it comes to the history of humanity and the development of it. The Greeks were also very involved with sports. Many statues were created to show the beauty and grace of a Greek athlete, Track and Field were the most popular sports. The ancient Greeks we re very fascinated with the human body (doc. 8). A great mind was the only thing equivalent to an attractive body. The Olympics first started in ancient Greece, having a similar situation to the Olympics today. Countries, butShow MoreRelatedHow Did Ancient Greece Influence Western Civilization1291 Words   |  6 Pages Ancient Greek made many advances during their time in many subjects still used today. The ancient Greeks advances in these subjects, influenced and contributed to the Western civilization. The Western civilization’s culture and outlook on life was shaped by ancient Greek. Many things the ancient Greeks created were the basis for what we use today, including, architecture, art, dramas, math, science, and philosophy. 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Epic Of Gilphash Essay The Epic Of Gilgamesh - 1043 Words

The Epic of Gilgamesh is an epic poem from ancient Mesopotamia and the poem was originally written on twelve clay tablets. An epic is a extended narrative poem centered on either a larger than life hero or a heroine that’s written in a dignified way. An epic usually has it where the hero is in search for either immortality, gods, or other supernatural creatures while delivering an impactful message. The Epic of Gilgamesh is called an epic because the poem has all of the characteristics of a traditional epic. The poem is about the adventures of King Gilgamesh, the king of Uruk, and the short lived yet powerful friendship between Gilgamesh and Enkidu. Gilgamesh and Enkidu’s friendship was very complex one, but their friendship was important†¦show more content†¦Enkidu doesn’t agree initially, but comes around and agrees to accompany Gilgamesh on the quest. The action of Enkidu agreeing to accompany Gilgamesh on a quest shows how much their friendship has p rogressed because he wanted to support Gilgamesh and help him out, which is a characteristic of a strong friendship. Once they arrived at the forest, they found Humbaba and killed him. Upon their return to Uruk, Ishtar, the goddess of sex and love, tells Gilgamesh that she wants to marry him. Gilgamesh declines her proposal because he did not feel the same way about her. Ishtar was furious about Gilgamesh declining her proposal, so she sent down the Bull of Heaven to kill Gilgamesh. Enkidu uses his knowledge of animals to kill the Bull of Heaven. The Bull of Heaven comes down and is killed by Enkidu. The action of Enkidu killing the Bull of Heaven shows how much he cares for his friend and that he doesn’t want any harm to come Gilgamesh’s way, which is another great characteristic that makes a strong friendship. When Enkidu killed the Bull of Heaven and cut down the cedar trees, the gods were not pleased with his actions. Enkidu was then sent to see the gods in council. They decided that based off of his actions that Enkidu must die. Enkidu’s death greatly impacted Gilgamesh and changed him. His death makes Gilgamesh experience emotions he hasn’t

Family Is One Of The Most Important Values - 1236 Words

I believe family is one of the most important values, especially for a person that comes from a shattered family like mine. From the first minutes of life, a child depends on their parents and family members for protection, love, and support. Parents and siblings are a child s first relationships, which normally creates an important foundation for a framework of values. Siblings frequently teach each other, help one another, and share life lessons; therefore family provides a background for individual growth. Parents are usually a child’s first educators, and regularly act as example in how to act and how to perceive the world. Although I grew up in a problematic environment, I did have a strong relationship with my parents. I remember my father caring for me; I have memories of us preparing lunch in the kitchen together. My father not only dedicated me quality time, but also made me feel safe and loved. 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Future Competitive Threats of China and India for Industries free essay sample

Discuss the future competitive threats of China and India for industries in developed countries. The emergence of China as the mass manufacturing pioneer in the world has lead to the concern that China will soon be competing with the industries in the developed nations. India, at the same time, is emerging as the centre of IT enabled services including software development, and poses significant threat to the developed countries in high-skill goods and services. Today, the main competitive threat that China and India pose to the developed nations is their cheap labour. They are able to produce basically anything at a much lower price compare to those in the western developed nations. Therefore, they signify threats to these countries. However, on the future prospects, China and India would acquire competitive threat that is different from what they were before. For instance, the education rate in China and India are both increasing, and they produce about half a million of scientists and engineers a year comparing to mere 60,000 in the US. We will write a custom essay sample on Future Competitive Threats of China and India for Industries or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Therefore, these skilled labours will take over the current low skilled labours in these two countries and further exploit the opportunities that they have, and compete better in the high skill sectors. In addition, many companies from the developed nations have shifted their RD centre to the China and India, therefore, China and India are able to learn and gain experience through these foreign RD centre and excel in innovations in the future. This makes the developed nations to lose their competitive advantage, and signifies competitive threat from China and India.

Do You Find the Rendition of Dracula’s Pursuit of Love Through the Centuries Sentimental free essay sample

What is your view? Do you find the rendition of Dracula’s pursuit of love through the centuries sentimental? He is Romeo, whose young wife, believing him dead, kills herself. He is Lucifer, vowing revenge on the God who has betrayed him. He is Don Juan, sucking the innocence out of his conquests. He is the Flying Dutchman, sailing the centuries for an incarnation of the woman he loved. He is Death, transmitting a venereal plague in his blood, in his kiss. He is even Jesus, speaking Jesus last words as he dies, a martyr whose mission is to redeem womankind. Husband, seducer, widower, murderer, Christ and Antichrist, Dracula contains multitudes. He is every mortal man and every mortality with which man threatens women (Corliss, 1992 ). But is he Bram Stokers Dracula? No, he is not. He is Coppola’s Bram Stoker’s Dracula humanized, redeemable, romantic, and tragic figure searching for his long lost love who has come across oceans and time to find it. And only Mina, the avatar of his dead wife, can provide it. Over the years Bram Stoker’s Dracula has been reworked to films many times. Even though Coppola’s film adaptation of the novel is considered as an essentially faithful rendition, the director made one far-reaching alteration to Stoker’s original: the inclusion of the romance between Mina and Dracula. According to some film critics this is the greatest flaw of the film. Originally Stoker’s Dracula is satanic figure, a force of pure evil while Coppola’s Dracula is romanticized hero. The film begins with a pre-credits sequence which tells us that Dracula is the historic Vlad the Impaler (making a factual mistake in saying that he ruled Transylvania. The real Vlad ruled Wallachia, a region of Romania). In this sequence we see that Vlad became a vampire when his beloved wife killed herself after reading a false note of her husband’s death. Later in the film, Dracula believes that Mina is his wife reborn, and he seeks to rekindle that love and make her his beloved again ( Miller, 2007 ). For many film critics this is incredibly unnecessary , and completely cliched, and there is no valid artistic reason to add this subplot. To Fred Botting, Bram Stokers Dracula is The End of Gothic, the final metamorphosis of a faltering convention into some strange and alien form hat destroys all of Gothics power. Harry Benshoff writes, Most of Hollywood’s recent big- budgeted remakes of the classical horror movies have all refashioned their monsters with romanticized narratives and sexy star appeal; for example, Francis Ford Coppola’s Bram Stoker’s Dracula was called by some critics ‘sentimental, not scary, Ã¢â‚¬Ë œprecisely because it grafted a romantic reincarnation love story ( not present in the Stoker’s original, but since the late 1960s an increasingly popular trope ) to the story of bloodsucking aristocrat. But why Coppola and screenwriter of the movie Hart go easy on Dracula this time around, why they dont let him pour out the venom and ferocious sadism that might magnetize the audience, why theyve played up a romantic-victim side that isnt present in the novel theyve otherwise adapted so faithfully. Perhaps Coppola felt that this addition might blunt the horrors of the film for a larger audience, but for many film critics the effect is to complicate an already intricate story, weakening an otherwise superior film. However, may be it is not appropriate to say that Stoker’s Dracula is better than Coppola’s Dracula simply because they are different. The thing that Coppola really should be blamed is to name his version Bram Stoker’s Dracula because in Stoker’s novel, Dracula is almost entirely a â€Å"monster†, in the sense that he has little or no perceptible motives other than to stalk and feed upon (subsequently horrifying and killing) his victims. He acts more as an animal, concerned only with his primal urges to survive (though he deals with these urges in sly, pre-meditated, human-like ways). In Coppola’s take, however, there is an alternate sub-plot which has Dracula as a passionate lover with almost super-human emotions. He is still a monster in the sense that he can transform into horrible beasts and kill people with no regret, but he does so to satisfy his longing for love. The viewer can almost sympathize with him as he cries over the loss of his lover, or claims that â€Å"the luckiest man who walks on this earth is the one who finds true love†. He is a man trapped inside a monster’s body. This is much different than in the book, where he is hated and feared without a doubt of his monstrosity. In fact, the mask of a human form that he hides behind in the book can even be seen to add to his sinister traits; that he would take a human form to deceive his victims just makes him that much more dangerous and downright creepy. He is a monster hiding in a man’s body while Coppola’s Dracula, on the other hand , looks much more like a human being who has been trapped in the body of a monster. In the late twentieth century, monstrosity becomes acceptable in popular culture when there are reasons behind it that surpass the purely one-dimensional evil of Victorian texts. In effect, Coppola’s postmodern vision delineates Dracula as a complex, multi-dimensional entity; a deeply emotional persona perched on the delicate boundary between man and beast, struggling between the incessantly carnal needs of the predator and the longing of an unrealized and possibly redeeming love (Sahay, p. ) Hence, utilizing the popular myths of true love and reinforcing it with â€Å"new age† beliefs in reincarnation, Coppola’s film represents Count Dracula as a redeemable soul whose humanized Otherness dispels much of his monstrosity. The vampire as an icon of evil exists side by side with its postmodernist counterpart. That the vampire created by Stoker has adapted so well without losing connection with its roots is a tribute to the power of the archetype, and of the novel ( Carter, ‘’ Has Dracula Lost His Fangs? ’’). Sympathetic vampires, like Coppola are more appealing to some contemporary readers, but this attraction has a price the loss of some of the power, grandeur and intensity that comes from a confrontation with something utterly diabolical. Count Dracula is appealing and interesting not in spite of the fact that he is evil, but because he is evil. Take that away and you weaken that ritual encounter with evil which is at the core of the best horror fiction. Yet, on the other hand, would the appeal of the vampire be as great were it not for the wave of sympathetic vampires?