International competition

Question 1

Measures of international competitiveness

Answer 1

1. relative labour cost (cost of labour from one country to another)
2. relative export price (price of a country’s export to another)

Question 2

definition of international competitiveness

Answer 2

The ability to compete effectively in international markets as a business or a country

Question 3

How to calculate unit labour cost

Answer 3

Wage + all other costs of employing one unit of labour / output per worker

Question 4

define unit labour cost

Answer 4

Total labour cost to the firm per output of goods and services

Question 5

Factors influencing competitiveness

Answer 5

1. cost factors (labour, production, exchange rates)
2. quality and innovation (high quality? RnD?)
3. infrastructure and logistics (short supply chains reduce cost)
4. government policies (corporation taxes? subsidies)

Question 6

benefits of being internationally competitive

Answer 6

1. increased exports
2. job creation
3. higher standard of living
4. economic growth

Question 7

problems of not being internationally competitive

Answer 7

1. trade deficits
2. unemployment increases
3. economic decline

Question 8

Why is the UK labour productivity failing behind?

Answer 8

1. Education and training
2. Capital and Infrastructure