Question

1)What are norms? Briefly describe the two categories of norms.

2)How do trade barriers constrain a firm's ability to disperse its productive activities?

3)Discuss the arguments for and against globalization regarding jobs and income.

Answer 1

1. Norms are social expectations that guide behavior. It explain why people do what they do in given situations. For example, in the United States, it is a norm that people shake hands when they are formally introduced. This expectation accounts for why a job candidate extends a hand toward the interviewer upon meeting — as opposed, say, to giving the interviewer a hug.

Two types of norms are folkways and mores

Folkways: Informal rules and norms whose violation is not offensive, but expected to be followed. It's a kind of adjusting, accommodating type of habits. It does not invite any punishment or sanctions, but some reprimands or warnings.
Mores: They are also informal rules which are not written, but results in severe punishments and social sanction upon the individuals like social and religious exclusion

2. trade barriers constrain a firm's ability to disperse its productive activities :

a) it increase the cost of export product to a country which leads to comparative disadvantage to indigenous firm in that country.

b) Quota may limit a firm's ability to serve a foreign country which lead to reduce the sale of the exporter country.

3. Globalization opponents argue that falling barriers to international trade destroy manufacturing jobs in wealthy advanced economies such as the US and Western Europe. Falling barriers allow firms to move manufacturing activities to countries where wage rates are much lower. Because of this, wage rates of poorer Americans have fallen significantly over the past quarter of a century. Supporters of globalization argue that free trade will result in countries specializing in the production of those goods and services that they can produce most efficiently while importing goods and services that they cannot produce as efficiently.