MACROECONOMICS

Macro Economics

Macro Economics

A:

The purpose of this report is to help DVD players understand why multinational corporations are seeking sources of comparative advantage by investing in developing countries. Specifically, tobacco subsidies for foreign farmers; how subsidies affect the equilibriums for tobacco and domestic food items; why DVD players produce DVD in Mexico and then shift assembly to the U.S.; and the gains and losses for consumers in these types of international production and trading pattern (Sawyer, & Sprinkle 2006).

The U.S. would subsidize the short run costs of production for tobacco farmers in foreign countries because it provides an incentive to the ...