Exercises: Globalisation: opportunities and risks

Define globalisation and describe its economic, cultural, and technological dimensions with an everyday example of each.

Name three factors that have driven globalisation (transport, communications, and trade liberalisation) and explain with an example how each contributes.

Explain what a multinational company is and describe the potential global supply chain of a T-shirt: where it is designed, where the cotton comes from, where it is sewn, and where it is sold. What does this journey show about modern production?

Present two opportunities and two risks of globalization for a country like Mexico, using concrete examples: markets for its firms, lower prices, offshoring, and external dependence.

A shoe factory in a town closes and moves production to another continent: $120$ people lose their jobs.

1. a) Analyze the direct and indirect local effects (businesses, municipality, families).
2. b) What policies could help restructure the town? Propose two and assess their timelines.

Data shows that global poverty has fallen significantly over recent decades, but inequality within many countries has increased.

1. a) Explain how globalisation can produce both effects at the same time.
2. b) Who would be the "winners" and "losers" of globalisation within a rich country? Reason your answer.

The figure shows how the final price of a $\$2\,000$ pair of sneakers is distributed across the stages of its value chain.

1. a) Which stages capture the most value and which the least? Read the figures from the graph.
2. b) Draw a conclusion on what a country should do to "keep" more of the value of what it consumes.

A city council passes an ordinance requiring municipal school canteens to source 100 % of their food from within a 50 km radius, arguing that "buying local is always more efficient, cheaper, and ecologically more sustainable than importing".

1. a) Drawing on the theory of comparative advantage and economies of scale, technically refute the claim that strictly local procurement guarantees greater economic efficiency and lower prices for taxpayers.
2. b) From the perspective of product life cycle assessment, demonstrate with a specific case (for example, heated greenhouse vegetables versus imported outdoor crops) why a product transported thousands of kilometers can generate fewer greenhouse gas emissions per kilogram than its local alternative.
3. c) As a municipal economic advisor, design a set of sustainable public procurement criteria that combines support for the local productive fabric with the protection of families' purchasing power and the efficient use of public resources.

Mexico is debating "reindustrialization" to become less reliant on foreign countries.

1. a) Set out two arguments for and two against manufacturing at home what is currently imported.
2. b) Propose a realistic industrial policy for a specific sector and defend its cost-benefit balance.