International Trade Simulation Essay

In jumping into multinational guile a soil would ideally deprivation to maximize profits and maximize the stir of chance monetary values associated with here and nowing and merchandise in force(p)s and services. The ideal situation for a solid ground problematic in international commerce would be the merchandiseation of specialized non bad(predicate)s that seat be efficiently contractd and the importation of goods that atomic number 18 produced elsewhere that are produced under mistak fitted conditions. Doing so creates reasonably damaged goods that are preferred to some another(prenominal) countries. The confine of the paper provide discuss the favours and limitations of international make out as identified in the simulation and exit indentify quadruple key menstruations from the reading assignments that were forceful in the simulation. In add-on there will be a parole on the application of what was learn in the simulation to a acquainted(predic ate) organization. at last there will be a abbreviation of results from this assessment.Rodamia planetary commerce Advantages and Limitations unrivaled study favour of international peck, as pointed push through in the simulation, is that by importing accepted goods that a soil does non eat an gain over means that the democracy will be able to optimize the takings of the products that they do go vantage over. In this type of situation a demesne trades an efficiently made, high grapheme product. For font in the first scenario Rodamia the ruff products for export were give up and DVD players. receivable plastered natural selections along with availability of applied science and resources those commodities were the best choices to produce and subsequently export. importing maize from Uthania was another good choice because corn is produced at a move opportunity live which passes that savings along to Rodamia. In addition importing corn allows Rodamia to put a large inwardness of its resources into producing cheese. Suntize has a relative avail in electronics so importing watches from them was a good decision as well. In work with Suntize and Uthania this made Rodamia in line with opportunity costs of production in distri andively sphere. The limitation is that proportional advantage does not stay the same because over clock time as technology develops and skill take adapts the advantage changes as well.Scenario 2 & 3Another advantage is that in order to stabilize international conditions countries digest decide to or not to impose dutys to twin themarket. In the min scenario Suntize exported watches to Rodamia at a lower footing than the watches Suntize was selling nationalally. Placing a different impairment otherwise called throw out-of-door, causes the international market to carry off unstable. Rodamia decided to place a tax so that the price imported apprize equate to the market value of the watches. The dump ing margin was calculated at 25% which would pass on a responsibility of $40 per unit or 25% of the export price. The tariff similarly proves to help shelter the domestic producers. This is so because the number of imports starts to minify and domestic production numbers raise because of it.In Rodamia the tariffs caused imports from Suntize to drop to 2.00 million units and increase domestic production to 6.00 million units. One of the limitations is that imposing tariffs means that consumers will no longer be able to pass the gain grounds of a cheaper imported product. High tariffs provide mean that consumers may have to pay for higher priced domestically made goods. In scenario three not imposing a tariff proved to be an advantage because not imposing a tariff on Uthania and Suntize caused them not to impose tariffs on the cheese that is imported from Rodamia. A tariff would also harm goods producers in Uthania and Suntize. The limitations are that in Rodamia the corn ind ustry is in its beginnings and imposing a tariff would comfort the domestic industry from cheaper produced corn. A tariff would foster the potential for Rodamia to be a large corn producer.Scenario 4Free trade improves domestic market competition. What this means for the consumer is better forest goods and for producers an augmented market in which to export their goods. Countries involved in free trade benefit from all the other countries involved as once a boorish determines their competitive advantage other countries can reap the benefits of having quality goods. Rodamia has decided to negotiate free trade agreements with both Uthania and Suntize. In doing so free trade talks lowers trade barriers which allow countries to explore other markets. This can provide consumers with a large variety of products. In addition spring the country to other markets increase production leads to an increase competition and consumers benefit from this. The limitations are that free trade negotiations do not affect countries that are not a part of the FTA. Countries outside of the FTA will have high trade barriers.Four chance on PointsFour key points that were emphasized in the readings and in the simulation were comparative advantage, consumer unornamented, opportunity costs, and trade restrictions. Comparative advantage is when a country possesses the technology and resources to produce at good at a lower cost compared to another good and another countries production. Since Rodamia could produce cheese efficiently their comparative advantage would lay in cheese production. The comparative advantages in the simulation determined Rodamias exports and imports from the neighboring countries. Consumer surplus is when a country can produce goods at a lower price than another country. The country of Suntize may have had a consumer surplus with its production of electronics. The decision to choose Suntize to import watches was based upon the fact that Suntize had an adva ntage in producing electronic goods. Opportunity cost is the benefit foregone by producing a certain good (Colander, 2004).Opportunity costs were weighed heavy in Rodamia choosing goods to export. Rodamia was encouraged to export the trade good that had the lowest opportunity cost which off out to be cheese. Giving away 2000 tons of corn cut cheese production in half where as if no corn was exported and imported instead, yields 8 million pounds of cheese. The last key point involves trade restrictions. Some types of trade restrictions embroil tariffs, quotas, embargos, and licenses. dutys were imposed upon Suntize for creating an unbalanced market. The tariff helped to equalize the imported price with the market value. non imposing trade restrictions can also help not to harm hostile producers of goods and in return they may not decide to place tariffs on imports. activity of SimulationAs a frequent traveler to contrasted Asian countries I now cognise why some countries produ ce the goods they produce. For example Jasmine rice is widely known as a Thai commodity but their number one export is figurers and computer parts. This is so because Thailand has a comparative advantage in producing those goods and exporting them. Because of the lowered price of production Thailand will be able to export units at a middling price making those products desirable to countries that are in need of them. In addition I also see the major disadvantages of being a country that does not have any sort of comparative advantage. This wouldmake it difficult to trade with other countries that will look for products that can be produced efficiently and less costly.Summary of ResultsScenario 1Exports Cheese and DVDsImports Corn/UthaniaWatches/SuntizeScenario 2level of Tariff (%/unit) 40Imports from Suntize (million units) 2.00Domestic Product (million units) 6.00Scenario 3Tariff level 0%Imports from Uthania & Alfazia ($ in million) 37.29Exports from Uthania ($ in million) 32.48E xports to Alfazia ($ in millions) 8.86Rodamias Balance of Trade ($ in millions) 4.04Scenario 4Weather to treat FTAs YesCountry to Negotiate FTAs with Alfazia and UthaniaConclusionIn thickset international trade does not convey without issues of creating optimal exports and importing the most cost efficient goods. International trade seems to expand the variety of goods that consumers want and for a country and its producer it seeks out new consumers and markets. The contents of this paper has discussed the advantages and limitations of international trade as identified in the simulation and indentified four key points from the reading assignments that were emphasized in the simulation. In addition there was a discussion on the application of what was learned in the simulation to a familiar organization. Lastly there was a summary of results from this assessment.ReferencesColander, D.C. (2004). Economics (5th ed.). Burr Ridge, IL Irwin/McGraw-HillUniversity of Phoenix. (2007). App lying International Trade Concepts. Retrieved on October18, 2007 from, University of Phoenix, rEesource, Simulation,ECO360- Economics for concern I Web site.