Essay on International Trade Simulation - 987 Words

The purpose of this paper is to summarize the International Trade Simulation, explain the basic concept of International Trade, emphasize the four key points from the reading assignments in the simulation, and apply these concepts to my workplace. Simulation Summary In the International Trade simulation, you are the Trade Representative of a small country called Rodamia. You are introduced to international trade--the theory of comparative advantage and the impact of tariffs, quotas, and dumping on international trade (Applying International Trade Concepts, 2003). In the first segment, it is your job to evaluate what products to produce within the country and what products to import based on the Production Possibility Frontier (PPF). Due†¦show more content†¦Basic Concept of International Trade According to Colander, The reason two countries trade is that trade can make both countries better off (2004, p. 416). In economics, the theory of comparative advantage clarifies why it can be advantageous for two countries to trade, even though one of them may be able to produce every kind of item more cheaply than the other. What matters is not the absolute cost of production, but instead, the ratio between how easily the two countries can produce different kinds of goods. The basic idea of the principle of comparative advantage is that as long as the relative opportunity costs of producing goods differ among countries, then there are potential gains from trade. International trade affects the economy by increasing the Aggregate Demand (AD), and by becoming a source of inputs for production. International trade based on the theory of comparative advantage will improve efficiency in allocating resources, as well as allow businesses to reach economies of scale - the situation in which costs per unit of output fall as output increases, consequently reaching competitive prices of international markets (Colander, 2004, p. 428). When an economy involves itself in trade, under the right circumstances, it is able to shift the Production Possibility Curve (PPC) curve outward, and achieve greater levels of output. This increase in production can be achieved through the use of more resourcesShow MoreRelatedInternational Trade Simulation Essay1294 Words   |  6 Pagesthere will always be demand. For some countries, supply cannot keep up with the demands for the economy and when that happens, international trade is sometimes an only option. As with any thing in life, there are advantages and disadvantages to international trade. One of the major advantages to international trade is that it allows countries with a surplus of supply to trade with another country that may have a shortage of that same supply. Another advantage is that if a country is in short supplyRead MoreInternational Trade Simulation and Report1965 Words   |  8 PagesInternational Trade Simulation and Report ECO-212 Principles of Economics - Robert Coates University Of Phoenix Faithlyn Wright, Trina Drinka, David Barrett, Amber Kemper, Josue Garcia July 11, 2010. Advantage and Limitation of International Trade International Trade is important to many countries because it allows a country to import products or resources that may be difficult to produce locally. As a result, this enhances the country’s growth and economic wealth, andRead MoreEssay about International Trade Simulation1416 Words   |  6 PagesInternational Trade Simulation Gina Caraiman University of Phoenix ECO 360 Kimberly Swaney March 5, 2007 International Trade Simulation Introduction This simulation will provide reasons for international trade and help me determine which countries to trade with, what products to import or export. Also, help with determining when to impose trade restrictions like: tariffs and quotas, and when to negotiate trade agreements. Overall, the story in this simulation has cast me in the role ofRead MoreEssay on International Trade Concepts Simulation827 Words   |  4 PagesInternational Trade Concepts Simulation Abstract The following paper will present information found in a simulation based on international trade concepts. Key points found from the reading will be noted and concepts discussed will be shown integrated in the workplace. International Trade Concepts Simulation International trade has become a very important means of survival for global economies in this day and age. As countries continue to grow and resources become smaller, trade with otherRead MoreInternational Trade Simulation and Report1417 Words   |  6 PagesInternational Trade Simulation and Report International trade is the exchange of goods, capital, and services across international borders or territories. In most countries this trade represents a significant share of their (GDP) gross domestic product. This type of trade has political, economic, and social importance to all nations involved. There are many factors surrounding international trade, such as, advantages, limitations, foreign exchange rates, and others. As we review these factors,Read MoreInternational Trade Concepts1095 Words   |  5 PagesInternational Trade Concepts Shelly Hall ECO/372 March 12, 2010 Robert Chase The Simulation on International trade concepts is a study of the country of Rodamia and the decisions the leaders made regarding imports and exports for the country. While Rodamia is a fictitious country, the concepts of international trade, tariffs, quotas, and imports and exports are all applicable to the effects on the U.S. economy. This paper will discuss in detail the meaning and effect each of these conceptsRead MoreThe International Trade Concepts1357 Words   |  6 PagesThe International Trade Concepts The International Trade Concepts simulation helps one to learn the advantages and limitations of international trade. One can also take what is learned from the simulation and relate it to the U.S. economy and the effects international trade has on it. Learning about how fiscal and monetary policies affect the exchange rate is important as well. Not only can one apply what was learned in the simulation to the U.S. economy but they can also apply it to their workplaceRead MoreAddressing International Legal and Ethical Issues Simulation Summary718 Words   |  3 PagesAddressing International Legal and Ethical Issues Simulation Summary LAW/421 August 6, 2013 Addressing International Legal and Ethical Issues Simulation Summary International trade is important and beneficial to business. However, international trade guides a safeguard of interests, specific business contract, defined law, forum of dispute settlement, and understanding of contract clauses. â€Å"A working knowledge of international law helps business owners and managers with global interests reduceRead MoreTheoretical Justification Of The Gravity Model1583 Words   |  7 Pagesmode has been successful in its accurate prediction of the trade flows between countries for the goods and services traded. However, most scholars believed that there were no existences of the theoretical justification for the gravity equation. In almost all the economic models, gravity relationship often arise including trade costs that tend to increase with distance. Besides estimation of the patterns involved in the international trade, gravity model presents utilizes factors that are closely relatedRead MoreA Comparative Analysis of Balance of Payments of India and China1657 Words   |  7 PagesComparison of Two Trade Integration Approaches By Przemyslaw Kowalski Discussion Matthieu Bussià ¨re European Central Bank New Delhi, 7 December 2007 Note: The views expressed in this presentation are those of the author and do not necessarily reflect those of the ECB. Main assessment of the paper †¢ A very nice overview of a key topic Useful comparison China/India A valuable effort to collect relevant data †¢ †¢ Two main assets: discussion of trade policy and model simulations Main suggestion: refocus