UCBP5006 International Economics

Assignment Sample UCBP5006 International Economics

Introduction

In this essay, the overall comparative and absolute advantages of French Red Wine, Greek Olives, and German cars will be analysed and discussed. Furthermore, the specialization of French Red Wine, Greek Olives, and German cars will be discussed elaborately and the opportunity cost of the French Red Wine, Greek Olives, and German cars will be discussed extensively.

French Red Wine

Comparative and absolute Advantage

The comparative and absolute advantage of French Red Wine is that the French red wine will be consumed more in the post-Brexit period as the society will be under a lot of stress and so the consumption of alcohol and alcohol-based products will be consumed more. This has been the general trend of the people post the Brexit era as under economic turmoil the consumption of alcohol increases with the increase of economic distress.

The consumption of alcohol will also increase as many people will lose their daily bread and will depend on alcohol-based products such as French Red Wine. The rate of the French red wine will increase however, that will not stop people from purchasing the French Red Wine in order to deal with unemployment (Henry, 2020). http://UCBP5006 International EconomicsThe unemployment will indeed take the sales of the French Red Wine to a higher level as there will be mass consumption of French Red Wine.

Specialization

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The specialization will increase as every other liquor shop will sell the French Red Wine as the demand for the goods gets higher where there is a low supply of French Red Wine. The low supply will be because of the taxes and duties imposed by the French government on the export of French Red Wine, especially to Britain. The people of Europe will be very eager to make purchases of French Red Wine as the demand will increase due to less supply.

The other factor is habituation which means that the people of Europe are habituated in drinking red Wine so the demand will be higher. On the contrary, the price will be high and the specialization will be more in the case of French Red Wine (Gardner, 2020). http://UCBP5006 International EconomicsThe people will buy the French Red Wine even though the price is high as they are habituated to buying French Red Wine.

Opportunity Cost

The opportunity cost will also be high as the price of other alcohol-based products will increase and so the people will buy more French Red Wine as people are habituated to making this purchase decision. The class factor also works in this scenario as the people will buy more French red wine as the opportunity cost will be high and the people will maintain the class.

The class or social status is a key reason for the opportunity cost being less as the people try to maintain the social class even though the price has increased as this is the general psychology of the people in Europe. The opportunity cost will be high in the event of other alcohol products being costly as the people will make a purchase of only the French Red Wine as it tastes better than the other alcohol-based products. The taste and preferences play a key role in the purchase of French Red Wine and the opportunity cost is high.

Greek Olives

Comparative and absolute Advantage

The comparative and absolute advantage of the Greek Olives is that Greek olives are preferred mainly by the people outside Europe as the Greek Olives are exported outside the European subcontinent. The export price has increased reasonably high and this has affected the comparative and absolute advantage of the export of Greek olives.

The rise in the price means there will be more inflow of foreign currency as the export will be substantial. The export price will help in making the economy stable in the Europe subcontinent and the other countries of Europe. The comparative and absolute advantage is that the price will be substantially high for the Greek Olives and this will benefit the overall economy to prosper as the export will increase and the foreign currency will be received (Lupan, 2019).http://UCBP5006 International Economics

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The other advantage will be that the Greek olives will reach the world market where the increase in the rate of taxes will impact the purchasing decision of the rest of the world as the supply will be more.

Specialization

The specialization will also increase as the Greek Olives will reach the world market and create a need-based opportunity for the Greek Olives. The people from other parts of the world will be more obliged to make the purchase decision as the demand for Greek Olives will increase and people will make more purchases of the Greek Olives.

The Greek Olives will be produced more as agriculture will increase substantially and will make joint efforts to increase the productivity of the Greek Olives. Therefore the specialization will increase and people will buy more Greek Olives. The Greek Olives have a special market in the food and beverage industry as it is used for cooking and the Greek Olive Oil is used as a medicine to cure many diseases (Cowell et al., 2020). http://UCBP5006 International EconomicsTherefore the purchase will be made by the food and beverage industry and also by the medical product industry.

Opportunity Cost

The opportunity cost will be less as there is no alternative to the Greek Olives. The Greek olives are produced in a warm environment and are very delicate. So its export will require care and attention in the post-Brexit period as the export has various rules and regulations and each of the rules and regulations has to be adhered to by the European Union and Britain.

These series of rules and regulations make the product cycle lengthy and Greek olives often become stale due to the step involved in shipping. The opportunity cost is low in this regard and this has led to the increased demand for Greek Olives by the rest of the World. The Greek Olive has many uses as the extra virgin Oil is taken out and sold in the market which is of great use. Therefore the opportunity cost is lower with respect to the Greek Olives which are sold in the market at a high cost due to increased demand and high supply.

German Cars

Comparative and absolute Advantage

The comparative advantages and the absolute advantages of German cars are less as the manpower to make the German Cars are high and the cost of labor is also high post Brexit and this has led to the low manufacturing of the German Cars. The German cars are in huge demand for their low maintenance and their low cost of material, however,

the German Cars are extremely costly due to post Brexit. German Cars have a low sales record as the cost of the cars is high and the purchasing powers have reduced in the post-Brexit era. Many people have lost their jobs and are unable to buy cars let alone German cars and this has affected the economy harshly and led to the great depression in the European Union.

Specialization

The specialization has also decreased as there is low manpower to manufacture the German Cars and the cost of the cars has reached sky height. This has created tremendous pressure on the specialization and the cost of living of the European Union.

The specialization has taken a hit as many people who were specialized to do the work had been laid off so the companies are finding pressure on the existing staff and so the cost of the German Cars has skyrocketed. The cost of labor is also forcing many people to work double shifts which means the quality of work is dropping and the German cars are not as good as they earlier it was found to be (Weale, 2017).http://UCBP5006 International Economics

Opportunity Cost

The opportunity cost has decreased as the cost of labor is more in the European Union and this has led to extreme pressure on the opportunity cost which is substantially low and less than ever.

The opportunity cost has taken a huge hit after the Brexit as many people were laid off so the price of the labor has increased and hence the price of the German Cars has also increased which cannot be considered under the purchase decision (McLeod, 2020). http://UCBP5006 International EconomicsThe opportunity cost has decreased significantly as there are no close substitutes to the German Cars as the cars are greatly made so that there are no substitutes present in the market.

Conclusion

In accordance with the above discussion, it may be concluded that the French Red Wine, Greek Olives, and German cars have substantial comparative and absolute advantages. The specialization of both the French Red Wine and Greek Olives is high and their opportunity cost is low based on the market trend. The German Cars have a low comparative and absolute advantage and have low specialization and opportunity cost.

References

Cowell, R., Flynn, A. and Hacking, N., 2020. Conceptualizing environmental governance in turbulent times: Insights from Brexit and waste in the UK. Political Geography, 81, p.102217.

Gardner, A.L., 2020. Brexit. In Stars with Stripes (pp. 57-101). Palgrave Macmillan, Cham.

Henry, L., 2020. Essays on the impact of Brexit on the agricultural and food trade: a European perspective and focus on the Brittany region and Ireland (Doctoral dissertation, Agrocampus Ouest; EDGE).

Lupan, R., 2019. Non-tariff regulations trends in the context of BREXIT and the relation of the United Kingdom and the Republic of Moldova with the European market. In Simpozion Ştiinţific Internaţional al Tinerilor Cercetători (pp. 57-63).

McLeod, J., 2020. Warning signs: Postcolonial writing and the apprehension of Brexit. Journal of Postcolonial Writing, 56(5), pp.607-620.

Weale, A., 2017. The democratic duty to oppose Brexit. The Political Quarterly, 88(2), pp.170-181.

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