In Today’s World, Globalization Came Under Attack After ✓ Solved

In today’s world, globalization came under attack after the

In today’s world, globalization came under attack after the spread of coronavirus. State 2 advantages (blessings) and 2 disadvantages (curses) to globalization. In your opinion, should the US and other countries support policies towards more openness, or move towards policies that restrict globalization?

Discuss how the equilibrium price and quantity change when a change in demand occurs and the supply stays constant.

Consider a market for laptops. First, let’s assume that the price of hard drives (part needed to make laptops) went up. What will be the impact on the equilibrium price and quantity of laptops? How your answer may change if the price of printers has gone up instead. Explain your answer.

Back in 1920, California minimum hourly wage was $0.33. In 2018, the minimum wage was $11.00. Did workers in 1920 get paid the same (in terms of purchase power) as workers in 2018? Explain your answer. (hint: CPI in 1920 was 20 while CPI in 2018 equaled 251.1)

What is the Circular Flow model? What are the main components of the model? What each market in the model is meant to do?

Consider Jack in the Box delicious restaurant. As a student, you visit it every week. After graduating college, you (and many other students) started a job paying above $60,000 per year. What will happen to the equilibrium price and quantity of Jack in the Box burgers? Please explain? (hint: assume these burgers are inferior good)

Paper For Above Instructions

Globalization has been a defining aspect of the global economy, especially in the context of the COVID-19 pandemic, which has prompted a reevaluation of its implications. This paper will outline two advantages and two disadvantages of globalization, assess whether countries should embrace more open policies or restrict globalization, explore equilibrium price and quantity changes in response to demand shifts with constant supply, analyze the impact of changing production costs on laptop market equilibrium, evaluate the historical earning disparity between workers in 1920 and 2018 based on purchasing power, explain the components of the Circular Flow model, and finally discuss the implications of increased income on demand for fast food, specifically Jack in the Box burgers.

Advantages and Disadvantages of Globalization

One of the primary advantages of globalization is increased economic growth. By allowing countries to trade freely, globalization enhances access to markets, encourages investments, and facilitates knowledge transfer, thereby driving economic development (Friedman, 2005). Additionally, globalization fosters cultural exchange, promoting diversity and understanding among nations (Rodrik, 2011). This exchange can lead to enhanced cooperation on global issues, such as climate change and public health.

However, globalization also has significant disadvantages. One major concern is economic inequality, as benefits of globalization tend to disproportionately favor wealthier nations and individuals, leaving many developing countries and workers behind (Piketty, 2014). Furthermore, globalization can lead to cultural homogenization, where local customs and traditions are overshadowed by dominant global cultures, leading to loss of identity (Hannerz, 1996).

Considering these aspects, it is crucial for the US and other countries to strike a balance. Policies should promote openness to capitalize on the advantages of globalization while implementing safeguards to protect vulnerable populations and address inequality.

Price and Quantity Dynamics

In microeconomics, changes in demand while supply remains constant directly influence equilibrium price and quantity. An increase in demand shifts the demand curve to the right, resulting in a higher equilibrium price and quantity (Mankiw, 2014). Conversely, a decrease in demand shifts the demand curve left, leading to lower equilibrium price and quantity.

Laptop Market Analysis

Considering the market for laptops, an increase in the price of hard drives—an essential component for laptop production—will subsequently raise production costs for laptop manufacturers. As a result, the supply curve for laptops will shift leftward, leading to a higher equilibrium price and a lower quantity of laptops available in the market (McConnell & Brue, 2016). If, instead, the price of printers rises, this would not directly affect laptop production costs, and thus, the laptop supply remains constant. Consequently, equilibrium price and quantity may not significantly change in this scenario unless printer demand affects consumer preferences (Kahn, 2020).

Comparative Purchase Power: 1920 vs. 2018

To analyze whether workers in 1920 were compensated similarly to those in 2018, one must account for inflation and purchasing power. In 1920, with a minimum wage of $0.33 and a CPI of 20, the equivalent purchasing power in 2018 dollars can be calculated as follows:

Minimum wage in 2018 dollars = Minimum wage in 1920 x (CPI in 2018/CPI in 1920) = $0.33 x (251.1/20) = $4.15.

Thus, workers in 1920 had a purchasing power equivalent to approximately $4.15 today, which is significantly lower than the 2018 minimum wage of $11.00. This analysis indicates that, when adjusted for inflation, workers in 1920 were not earning equivalent wages in terms of purchasing power (Bureau of Labor Statistics, 2019).

The Circular Flow Model

The Circular Flow model is a fundamental concept in economics that describes the flow of goods, services, and money in an economy. Key components of the model include households, firms, the product market, and the factor market. Households provide factors of production (labor, land, capital) to firms, which in turn produce goods and services to be sold in the product market. In the factor market, firms pay households for their labor and resources, creating a flow of income back to households (Case & Fair, 2016).

Impact of Income on Jack in the Box Burgers

Considering Jack in the Box as an inferior good, an increase in income, such as obtaining a job paying above $60,000, leads to decreased demand for its burgers. As individuals substitute Jack in the Box for higher-quality dining options, the equilibrium price and quantity of burgers will decrease (Stiglitz & Walsh, 2006). This shift demonstrates the nature of inferior goods, where demand inversely correlates with consumer income.

Conclusion

In conclusion, globalization presents both opportunities and challenges. While it fosters economic growth and cultural exchange, it also exacerbates inequality and cultural loss. The interplay of demand and supply in economic models, such as in the laptop market, underscores the importance of understanding market dynamics. Furthermore, historical wage analysis and the Circular Flow model enhance our comprehension of economic interactions, while the effects of income changes on consumer behavior further illustrate the vitality of economic theories in real-world applications.

References

• Bureau of Labor Statistics. (2019). Consumer Price Index Historical Tables.
• Case, K. E., & Fair, R. C. (2016). Principles of Economics. Pearson.
• Friedman, T. L. (2005). The World Is Flat: A Brief History of the Twenty-First Century. Farrar, Straus and Giroux.
• Hannerz, U. (1996). Transnational Connections: Culture, People, Places. Routledge.
• Kahn, M. E. (2020). Urban Economics and Real Estate: Theory and Practice. Academic Press.
• Mankiw, N. G. (2014). Principles of Economics. Cengage Learning.
• McConnell, C. R., & Brue, S. L. (2016). Economics. McGraw-Hill Education.
• Piketty, T. (2014). Capital in the Twenty-First Century. Harvard University Press.
• Rodrik, D. (2011). The Globalization Paradox: Democracy and the Future of the World Economy. W.W. Norton & Company.
• Stiglitz, J. E., & Walsh, C. E. (2006). Principles of Economics. W.W. Norton & Company.