Trade

International Trade Simulation

Amanda Foshee

XECO/212

June 2, 2013

Professor Jan Y. Cohen, M.S., M.S.A., N.H.A., H.F.A.

International Trade Simulation

International trade is very profitable for any country that gets involved with trading. When trading between countries, the country needs to decide what will make a profit. If another country has more of one thing that you do not then receiving that item will make a profit in that country, while the other country makes a profit off of receiving something they do not have. If you have something that is profit at both ends it prepares for a long lasting working relationship between the countries. The World Trade Organization (WTO) has been set-up to increase the international trade. It is an important part for the continual evolution of the international trade (World Trade Organization, 2012).

Simulation

In the simulation of trade for the country Rodamia, you had to decide with which country you wanted to trade with Uthania, Alfazia, or Suntize. You had to decide whether to import or export a good or service that will make a profit for the country. In the simulation you had to decide whether to import or export cheese, corn, DVD players, and watches. Trading with other countries can give consumers and producers a better choice for the prices that it is selling for and the goods that are going to be sold. Local venders will increase productivity to keep up with the supple demands of that market in other countries. Consumers will buy more because of the prices they are seeing for the better quality of product.

In the simulation absolute and comparative advantage were talked about. Absolute advantage is that the country can produce a good, which is a true resource, at a lower price than any other country could. Comparative advantage means that a relative good is produced at a lower cost compared to another country cost to make it.

The theory of comparative advantages is...