Trade Simulation Report

In: Business and Management

Submitted By dasierraowens
Words 1588
Pages 7
International Trade Simulation and Report
Team B:
Kimberly Castillo, Tanya Bell, Elijah B. Gowdy, Derrick Brown
ECO/212
June 6, 2012
Instructor, John Holmberg

One Advantage and One Limitation of International Trade
Advantage and limitation of International Trade, Countries have different quantities, qualities, and cost for resources such as land, labor, capital, and entrepreneurship (University of Phoenix, 2009). International trade is the import and export of these resources between countries. International trade allows countries to distribute their resources more efficiently. Importing and exporting of resources is vital to the economy.
A gain from International trading is a price increase or decrease, in the local markets. If it is cheaper to make a good and export the good the importer will gain from trade by getting a good at a better price than what the opportunity cost of it would be. If the market price was higher, a lower price exporter will allow market price to fall and pose a benefit for consumers, in the sense that everyone gains the most with minimal losses in the short run.

Four Key Points Emphasized in the Simulation
Within the simulation team b has identified four key points that were underlined. First there is what is called dumping. Dumping is the selling of goods and products in other countries at a cost that is lower than the cost of those goods and products in its own country. Another key point identified in the simulation was consumer surplus. Consumer surplus is the variation between what a consumer would be prepared to pay and what they actually pay for each unit of a product. If the demand for a product is high then the consumer may be willing to pay a higher price that is set by the producer the producer. There was also what is referred to as deadweight loss. Deadweight loss is the loss of…...

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