...Rodamia is a large country with tremendous potential. It is surrounded by three countries with different industries. Suntize is a country with a well defined industrial infrastructure. Alfazia has strong productions in agriculture, and Uthania has an established agricultural and industrial economy. All are potential trade partners. This Memorandum explains the factors of economic growth for Rodamia, the production possibilities frontiers, trade agreement and policies, and recommendation for the president of Rodamia to consider in his plan to form trade partners with its surrounding neighbors. I am advising the president of Rodamia recommendations for international trade. International trade is the exchanging of goods and services with one another. Many countries have particular resources that are not obtainable in the other, to meet the desires and wants of both countries so they trade. Many advantages and limits are concerned with trading. Benefits occur for each country, but there are many additional limits put into place to manage the amount and quality of international trade. Specific issues have an effect on international trade such as foreign exchange rates and government policies. Groups such as World Trade Organization who over looks international trade along with their members, making sure that rules and agreements are followed. Many advantages to international trade and few limitations that can be encountered in this simulation. One advantage of international trade...
Words: 1071 - Pages: 5
...production expansion. International trade increases a country’s gross domestic product (GDP) by increasing the production of products sold to other countries. The free trade agreement between Rodamia, Uthania, and Suntize allowed each country to more efficiently use their resources to increase wealth through the comparative advantage of their export commodity. The flipside of international trade is another country’s ability to produce an export more efficiently than the importing country, causing domestic producers and firms to lose revenue or the opportunity for additional revenue. For example, if Rodamia continues a free trade agreement with Uthania for imports of corn, Rodamia misses the opportunity to become a large producer and net exporter of corn – hurting domestic producers and firms. To counteract the loss of increase revenue for domestic producers and firms, the Rodamia government can impose a tariff – place a tax on the corn or limit the amount of corn imported from Uthania – a quota. The government placing a tariff or quota on corn imported from Uthania protects domestic producers and firms from cheaper imports of corn and affords time to develop efficiency in the production of corn. In retaliation, Uthania may decide to impose a tariff or quota on exports from Rodamia. For both countries, the price of imports increases and consumer surplus decreases. Tariffs and quotas restrict free trade and diminish revenue. Trade Simulation Here...
Words: 1574 - Pages: 7
... This is a report for the President of Rodamia to discuss the advantages and the disadvantages of international trade between Rodamia and the surrounding countries around Rodamia. This report is also going to discuss the absolute and comparative advantage. Based on the information from this report, there is going to be a possible recommendation to the President of Rodamia whether or not to trade internationally. There are times international trade becomes very important and vital to a countries economy because most economies operate on the basic economic principal of supply and demand. It is not possible for every country’s domestic supplier to meet the domestic demands of that country and when this happens, that country can opt for international trade. Many countries chose international trade because their domestic suppliers are not able to produce the goods that can be brought in from other countries. However international trade has advantages and disadvantages. One advantage of international trade is that Rodamia could import goods that are made more efficiently by other countries. Our domestic suppliers may not have the equipment or man power to make certain goods and trading internationally allows Rodamia to give its consumers more options at lower prices. By allowing other countries to trade with Rodamia, this allows domestic suppliers to create goods and have excess stock of a certain good. When the country for which Rodamia is trading with runs out of that particular...
Words: 1177 - Pages: 5
...International Trade 2011 [Pick the date] Rodamia is a country that is considering international trading of goods to bordering countries. The bordering countries are Uthania, Alfazia, and Suntize. Rodamia is the largest of the four countries. Rodamia’s GDP consists of four percent agriculture, thirty percent of industry, and sixty six percent of service into its economy. The President of Rodamia Michael Jacobs wants to change the trading policies from being negligible. Lisa Drake is the Trade Commission of Rodamia; Lisa supports research on international trade issues and provides advice to help formulate international trade policies. Walter Barnes is the Deputy Trade Representative for Rodamia; Walter makes negotiations with neighboring countries in trades and handles any irregularities in trading. Rodamia’s advantage in the simulation was the ability to trade certain product with its neighbors in order to obtain the amount of product that was in demand. Rodamia also was able to effectively make trade with other countries, and monitor the rates of imports and exports in its country. The limitations that Rodamia had encountered were the amount of product that they were able to trade because of the demand from other countries. Rodamia had limited amounts of products that other countries wanted. Rodamia also encountered limitations on what countries they were able to trade with, this limited there negotiations with trading. If Rodamia was able to trade with other foreign countries...
Words: 1140 - Pages: 5
...The Free Trade Agreement between Rodamia and its neighbors allows the countries to expand into new markets and presents consumers more options. Exporting goods from Rodamia will increase capital that Rodamian businesses can use to invest and expand their operations and employ more citizens so the entire country benefits. The countries involved in the Free Trade Agreement encounter obstacles with other countries not in the agreement. The countries not in the agreement face higher tariffs, or quotas limiting the number of goods. Even if the nonmember’s goods are more price competitive, the barriers to free trade will raise the price and consumers will not benefit. (Applying International Trades Concept, n.d.) Some of the concepts the simulation emphasized are, tariffs, free trade, trade restrictions, and gains and losses. Rodamia was going to implement tariffs to protect its domestic watch market from the dumping of Santize watches. The watches were going to be sold at lower prices in Rodamia than in Santize, causing injury to the domestic market. Free trade allows the countries to improve competition and provide consumers with better quality goods while trade restrictions can protect markets from dumping and protect emerging markets. When engaging in trade a country will experience gains and losses. A country will produce and export goods that it can efficiently produce and increase its economy, but a country will experience losses from the importing country because that country...
Words: 274 - Pages: 2
...AS THE TRADE REPRESENTITIVE OF RODAMIA BY TAMARA MARTIN XECO/212 - PRINCIPLES OF ECONOMICS (AXIA) KRISTIN PAUL As the trade agent of Rodamia, I would base my recommendation on worldwide trade concluded based on the following conclusions. Rodamia is the large-scale country as well has it has the biggest economy amidst its neighbors. At least 4% of the country’s GDP arrives from its agriculture for example maize, wheat, and cotton fabric, dairy, and poultry products. 30 % of the country’s GDP comes from commerce, and the other 66 % arrives from the services provided. Opening up Rodamia to worldwide trade would free up the household markets and permit for discovery and technological advancements. The nations they will be searching to trade with are Uthnia, Alfazia, and Suntize. All of these nations have certain things to offer and can be considered great assets to acquiescing on a trade affirmation with us. International dealing is a significant facet to our finances as well as other nations well being. This is significant because dealing permits nations the opening to obtain items and services that are not accessible in their own countries. For demonstration purposes, if one homeland focuses in agriculture than it will have an advantage in dealing with a homeland that focuses in services. In this replication, I would be suggesting the President of Rodamia for recommendations for international trade. One benefit of worldwide...
Words: 897 - Pages: 4
...International Trade Simulation xxxxxx XECO/212 x/xx/xxxx xxxxx With international trade simulation this is showing how the international trade is able to function within all countries. With the simulation it provides a short overview of how to implement the trade restrictions within all tariffs. The most important thing is that the simulation is able to provide fundamentals about how you need to negotiate trade agreements. In the Rodamia simulation it is great that with this you’re able to see how all international trades are coordinated. In the Rodamia representative office is the place where all the major business decisions are decided and were all investment policies are born. Inside of the simulation the main guy is that Michael who is the president of Rodamia. Michael presents the image that he is a good businessman and is capable of handling international trade negotiations with other countries. Rodamis is one countries that has a GDP of 4% from there agriculture, and 30% from there poultry and other types of services. The rest of the 66% comes from many different types of services. There is an advantage of international trade. This advantage is that of gaining the cost of principles. Efficiency with comparative advantages is able to allow other countries to be efficient with inputs that they put and also there outputs will be better than if it were done alone. Many of the trade restrictions can be beneficial to countries some of these could be that of quotas, embargos...
Words: 1101 - Pages: 5
...International Trade International Trade Learning Team C November 15, 2010 ECO/212 Nancy Irizarry INTERNATIONAL TRADE International trade is very important to a global economy. When countries can trade products and services that they produce with other nations without obstacles, it creates a robust economy for those exporting and importing their products and services. However, there has to be a balance between the nations to prevent protectionism, isolationism and high tariffs on imports, which can lead to trade wars. The debate over free trade and tariffs is a very complicated process as evident with the creation of the World Trade Organization (WTO). “The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. The goal is to help producers of goods and services, exporters, and importers conduct their business” (WTO, 2010, p.1) Free trade has its advantages and disadvantages. The advantages and disadvantages depends on the frame of thought regarding trade. Within the simulation for international trade, one such advantage was the ability of a country to have a comparative advantage over another . When speaking in terms of a comparative advantage, its referring to a nations ability to produce a product or service at a lower price than another nation. Producing a product or service at a lower cost is the foundation of international trade. All countries who trade have the comparative...
Words: 1700 - Pages: 7
...International Trade Simulation Thomas Ralston XECO212 November 4tn, 2012 Tonya Wilhelm International Trade Simulation In order to take the next step in economic success Rodamia will need to analyze the advantages and limitations of international trade. Rodamia has the benefit of having the largest land mass compared to our neighbors. As a country we rely on three main areas for economic stability. These areas are agriculture (corn, wheat, and cotton), services, and industry. Neighboring countries Alfazia, Uthania, and Suntize vary in size and economic stature. Alfazia mainly relies on the strength of agriculture, while Suntize is a hot bed for tourist attractions, finally Uthania who is known for its confectionary chocolates also relies on its strong industrial sector. While looking at opening up international trade with more than just our neighbors is the long term goal, short term results can be had from dealing with them. Countries who rely heavily on international trade do so because of what is known as comparative advantage. Comparative advantage is can when a situation such as a country can produce a good at a lower opportunity cost than a competitor. This advantage comes about because some countries experience different costs when manufacturing the same goods. Absolute advantage is when the country's ability to produce a good or service at a lower cost per unit than the cost any other country produces that good or service. This occurs when a country is...
Words: 1094 - Pages: 5
...The simulation identified Rodamia’s bordering countries provide an opportunity for international trade and investments that could greatly benefit Rodamia. International trade with other countries would give consumers more choices in price and quality of goods. The domestic producers would increase production to meet market demands in other countries, producing more capital for investing in new avenues. The interaction of trade between the countries will make the countries more vibrant and wealthier. Limitations of international trade are placed in the form of tariffs, quotas, and regulations. These limitations offer protection in certain circumstances but can have negative if used to retaliate for reasons such as political differences (Colander, 2004). The simulation emphasized four key points from the team’s weekly reading assignments, including comparative advantage, the principle of increasing marginal opportunity, the protection possibility curve, and limitations on international trade. The following details the four key points. 1. Comparative advantage is the ability of one country to produce a good or service at the lower opportunity cost than a competing country (Hubbard & O’Brian, 2010). The simulation showed Rodamia produced cheese and DVDs with a lower opportunity cost than corn or watches therefore Rodamia should export cheese and DVDs and import corn and...
Words: 1571 - Pages: 7
...International Trade and Stimulation Univerisity of Phoenix Angela Rogers September 2, 2012 The simulation has provide reasons for international trade and helped me to determine which countries that we should trade with, what type of products we should import or export. I will also be able to determine when we should impose trade regulations such as tariffs and quotas. If our country should buy or sell any type of goods or services this is considered trading. International trading is considered really controversial while domestic trading does not have as many problems as international trading seem to have. If you should purchase items that are foreign made products the prices are lower and the quality of the product is better than an item that made in the United States. The practice of internationally trading has caused some companies within the United States to go out of business. This means that the employees that work at the companies will lose their jobs because of businesses closing in the United States. If you should ask most Americans they are in favor of keeping jobs in the United States instead of the jobs going overseas. This means that Americans are in favor of reducing international trading and buying American made products. The change in government policy, inexpensive communication and shipping has increased due to the results of international trading. Governments have changed policies that effect international trading by lowering...
Words: 1051 - Pages: 5
...is making a decision on whether or not they are going to trade internationally, they need to weigh out each advantage and disadvantage with each country they are trading in. Advantages versus Disadvantages As a country is deciding on international trade they need to see what their own opportunity costs are as well as if the country they are doing business with is going to benefit from the trade as well. One thing that needs to be looked at first is the strength one country’s currency against the other. This can create an advantage as well as a disadvantage because if the country’s currency is weak compared to the others than it would better to export and vice versa. One advantage that was found during the simulation was the fact that Rodamia was able to specialize in the production of corn. The production of corn was the largest part of their agriculture. They were also able to specialize in exporting many of their industry specialties because this was also thirty percent of their GDP. With being able to specialize in these areas the country was able to maximize its profits from the things they were able to utilize the best and import the things they gave up to make more of what they specialized in. This is where my comparative advantage came into play. Comparative advantage is basically being able to specialize in one thing over another. It means that the opportunity cost is lower when producing that particular product. An example of this is...
Words: 1122 - Pages: 5
...International Trade Simulation Week 8 Eco 212 The international simulation report is a compilation of the findings and outlines that reflect advantages and limitations of international trade as a whole. After reading the international trade simulation I did find that there are four distinct points that represent the elements that make up the report. I will be reviewing each point in depth along with providing a compare and contrast of the influences and advantages. I will finally end with a discussion that brings to light the issues surrounding the international trade report and provide a summary. The economy of Rodamia relies on three main areas: agriculture, industry and services. The country is surrounded by neighbors who produce similar and different products. Uthania is specialized in making chocolate and confectionary, but also produces goods such as minerals, coals and corn. On the other hand, Suntize is a tourist attraction which is good at producing electronic goods. Lastly, Alfazia is an agrarian economy and produces goods like corn, rice and cotton. On global interaction there is an economic characteristic where a nations exchanges goods and services to others. Globally this is known as importing and exporting production. Those nations with an open economy in the world is involved such processes with other nations, but they need to make sure they have positive interactions with the nations trading with and some of the traits would be to trust...
Words: 1112 - Pages: 5
...International Trade Simulation and Report The global economy is based on international import and export of goods and services between countries. International Trade brings the opportunity to expand local markets in order to get greater competition and therefore more competitive prices. It is very important that governments develop smarts strategies that produce good results of exchanges while enabling them to comply with International Trade regulations to ensure that market function properly. As part of this paper Team A will discuss advantages, limitations and regulations of such important system. In addition it will analyze some factors that influence affecting foreign exchange rates. For a better analysis of International Trade Simulation and Report, Team A will evaluate concept summary results for the assessment and indentify the effects of government policy on economy behavior. One of the most important international trade advantages mention on the simulation is the free trade agreements between countries that tend to specialize in comparative products allowing each country to stimulate economic growth and the consumer’s benefits from the variety of quality products to choose from in bigger markets. Trade agreements, lower customs tariffs, and other trade barriers between countries which consequently benefit by the increase of the amount of goods that it could be trade, while at the same offers the benefit of creating new jobs. Equally important, international trade...
Words: 2350 - Pages: 10
...Comparative & Absolute Advantage There are many different advantages that can be gained when working in the different economic markets. There are two advantages known as a comparative advantage and an absolute advantage. Absolute advantage is known for the capability of a individual or country to produce a good or service with less assets than another country or individual. Comparative advantage is the capacity of an individual or country to manufacture a particular product for a lower opportunity rate than another individual or country. Comparative advantage in the production of cheese can result in a much more constructive balance when it comes to trade for Rodamia. While international trade offers many advantages, there can be several disadvantages as well. The process known as dumping is a limitation of International Trade this occurs when a country elects to sell exported products at a lower cost than it does to its local residents. Romadia was left with two alternatives, whether to impose tariffs, or set a quota on its import products. These alternatives will generate an unfavorable effect since it will cause a shortage and an increase in the cost of the products. The increase in price will lower the demand for the products. As a result, these effects will hinder the company’s growth. Influencing Foreign Exchange Rates Foreign Trade is one of the things that have a strong hold on the way the economy works globally. The one thing that ties the entire world together...
Words: 417 - Pages: 2
