Question

Matching Question:

1. learning effect: Over time, labor learns the most efficient way to perform particular tasks by repetition.
2. skills in subsidiaries: Mature multinational enterprises have been successful, but skills to lower costs of production and enhance perceived value may come from other locations.
3. core competence: Core competencies enable a firm to reduce the costs of value creation and/or to create perceived value in such a way that premium pricing is possible.
4. labor productivity: When a task is complex and involves more steps, there is more that can be learned, and each time a step is performed more efficiently, costs will be decreased.
5. openness and incentives: Managers must have a way to identify new and good ideas and skills and provide incentives to share and experiment with these ideas.
6. increase volumes: The way to recoup development costs and achieve leverage with suppliers is to expand into global markets, as domestic markets may not produce sufficient volumes.
7. optimal locations: The firm will benefit by basing each value creation activity it performs at that location where economic, political, and cultural conditions are most conducive.
8. leverage/replicate: The skills may exist in developing, producing, and marketing goods and services beyond the original goods and services. It can also mean extending the business model.
9. economies of scale: Economies of scale come from spreading fixed costs over large volumes, servicing large markets, and working with global sources of supply.
10. global web: Managers must assess transportation costs, trade barriers, and political and economic risks to determine the best location for each value creation activity.

a. firm capacity, idea
b. firm capacity, activity
c. location economies, idea
d. location economies, activity
e. cost reduction in start-ups, idea
f. cost reduction in start-ups, activity
g. fixed and variable costs, idea
h. fixed and variable costs, activity
i. capturing and using new skills, idea
j. capturing and using new skills, activity

Answer 1

The question focuses on the impact of learning, core competencies, and economies of scale on worker productivity in intra-industry trade, and how these play a part in evolving comparative advantages and international trade dynamics.

Step-by-step explanation:

The question presented pertains to intra-industry trade and the various strategies and dynamics in multinational enterprises and their production. It delves into concepts such as learning effect, core competence, and economies of scale, highlighting the significance of locations and how firms and countries must be adaptable as comparative advantages can evolve over time. Such adaptability may come from the acquisition of new skills, innovation, and the strategic positioning of various segments of the value chain. International trade is also influenced by these factors and reducing barriers to trade, like tariffs, can yield numerous benefits including cost-reduction and improved efficiencies.

Two benefits of reducing barriers to international trade include allowing countries to focus on producing goods they make most efficiently, leading to profitable industries and higher-quality, lower-cost goods for consumers. Additionally, economies of scale can be realized as firms spread fixed costs over larger volumes, leading to lower per-unit costs.