I. Demographic Environment – Human populations in terms of size, density, locati
ID: 396003 • Letter: I
Question
I. Demographic Environment – Human populations in terms of size, density, location, age, gender, race, occupation and other statistical data
A. Briefly describe the basic nature of the U. S. Population and discuss the general business implications.
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B. List the four (4) factors of population change and discuss the general business implications of each.
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C. Briefly describe the basic nature and impact of geographic mobility in the U. S.
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II. Theory of Comparative Advantage
A. Briefly define the Theory of Comparative Advantage and discuss the international trade
implications of the theory
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B. List the three U.S. comparative advantages discussed in the Podcast and briefly discuss the
implications of each
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C. List the three U.S. comparative disadvantages discussed in the Podcast and briefly discuss the
implications of each
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III. Global Organizational Forms (Multinational Firms)
Briefly describe and provide an example of the Ethnocentric Form.
Briefly describe and provide an example of the Polycentric Form.
Briefly describe and provide an example of the Geocentric Form.
Explanation / Answer
Briefly describe the basic nature of the U. S. Population and discuss the general business implications.
Various demographic factors affect the business trends of a country. Specific to US, following are the parameters that are worth a mention
Income
The GDP per capita is a good demographic factor that affects businesses in a major way. Obviously with higher per capita income, the portion of disposable income goes up. This increases the spending propensity of a population.
For US, this number has been seeing an increasing trend in recent years with 54225 USD in 2017. This is a positive trend in relation to business interests.
Age Variables
A country’s measure of its productive workforce can be indicated by the age based demography. A younger population would mean a much bigger and productive workforce, which would obviously work for a country’s business interests.
In this parameter, US has a growing concern since in the coming decades, the percentage of the older people will outnumber the young bracket. Currently, the age group 25 to 65 is around 51% with 15% over the age of 65
Four factors of population change and discuss the general business implications of each.
Fertility Rate: Defined as number of children per one woman of child bearing age, this has a tremendous effect on the businesses of a country. A falling fertility rate would mean an ageing population over the years which would mean a lesser magnitude of workforce and more government expenses on care of the elder generation.
Mortality Rate: There is no specific answer as to how mortality rates affect the economy. For an ageing population, a high mortality rate is an obvious detriment since there will be a serious population de-growth. On the other hand, a large population can probably benefit out of a balanced mortality rate since population explosion will be avoided in such a case.
Immigration: This is a hotly debated topic in recent times and the outcome is out for anybody’s interpretation. There is a school of thought that states opening of borders encourages sharing of knowledge and best practices. They are vehemently against protectionism and are champions of a free market economy. On the other hand, a school of thought says that with open borders, native population loses the chance of employability and hence affects the nations productivity.
Government Restrictions: Restrictions such as the ones China has over birth rates can be hamper business interests, since curbing population growth may give rise to a burgeoning elderly population.
Briefly describe the basic nature and impact of geographic mobility in the U. S.
Geographic mobility is essentially a measure of how many Americans have moved over a year. Since the 1960s, this percentage has fallen by 50%, which means lesser Americans are moving from their native locations. Why is it important for this percentage to grow? A more mobile population can be more opportunistic and claim more salaries, thereby making the economy more dynamic.
The reason for low mobility are low wages restricting setting up of new work bases, and ineffective safety net programs.
Briefly define the Theory of Comparative Advantage and discuss the international trade implications of the theory
Comparative advantage is an economic principle that refers to the ability to manufacture goods or produce services at a lower opportunity cost than competitors.
To understand the international trade implications, consider US and China. For China, its comparative advantage is cheap labor by the virtue of which they can manufacture goods at a much lower opportunity cost. For US, the comparative advantage is that it can manufacture specialized goods at a much lower opportunity cost.