Essay about International Trade Simulation - 1416 Words

International 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 of the Trade Representative of Rodamia, where my office develops and coordinates international trade and investment policies, and leads negotiations with other countries on above mentioned subjects. I am the presidents Chief Trade Advisor,†¦show more content†¦Scenario two: 1. Would you levy an anti-dumping tariff or impose a quota? I would levy and ad valorem anti-dumping tariff, (Ad Valorem Duty means value added; it refers to a duty, tariff, or tax that is a percentage of the price of the product.). Because 2. At what level would you set the tariff or quota? I would set the tariff at $40/unit, because even though the tariff raises the price of the product and can lead to loss in consumer surplus, some of this loss is compensated by a gain in the governments revenue from the tariff. This leads to a lower deadweight loss as compared to what happens with a quota. This tariff is 25% of the export price which is equal to the dumping margin. As the price of watches increases because of the tariff, imports from Suntize decline to 2.00 million units and domestic production increases to 6.00 million units. Scenario three: 1. Would you impose a tariff on imported corn? Yes I would impose a tariff on imported corn from Uthania and Alfazia because I need to protect my infant domestic industry which would give me time to attain productive efficiency. 2. At what level would you set the tariff? I think a level of the tariff should be at 6.00%. I realize that imposing this tariff means that Uthania and Alfazia can also impose tariffs on cheese imported from us, but our balance of trade decreases to $4Show MoreRelatedEssay on International Trade Simulation987 Words   |  4 Pagessummarize 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 InternationalRead MoreInternational 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. 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