International Trade Simulation
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No two countries are perfectly alike. Each has a different set of advantages, such as rich mineral deposits, a climate and land suitable for agriculture, a strong infrastructure, skilled laborers and professionals, and even funds available for investment and entrepreneurs who know how to use them. When taken together, each country will find that it has a competitive advantage at producing some products rather than others. By exporting these products, and importing those which are more expensive to produce domestically, a country can use international trade to enrich its citizens and increase the wealth of the country as a whole. The simulation begins with the government of Rodamia considering the fostering of trade relations with its neighbors. The first step in the process is to calculate the opportunity cost of each product that the country presently produces. The opportunity cost is the production that must be given up in order to produce an item. For example, farms can use land to grow corn, or they can let cows graze in those fields and produce cheese. You cannot use the land for both. The set of combinations which fully utilize all of a country's assets are called the production possibilities frontier (PPF). In the year 2XX4, the opportunity cost ratio for corn and cheese in Rodamia is 1 unit of corn to 2 units of cheese. This ratio is then compared to the ratios in the nearby countries: 1:1 in Uthania and 1:1.5 in Alfazia.
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Some common words found in the essay are:
Alfazia Rodamia, Trade Simulation, Alfazia Rodamia's, competitive advantage, opportunity cost, units watches, dvd players, 1 unit, produce 2, 2 units, 1 unit corn, rodamia considering, free trade, unit corn, free trade agreements, units watches suntize, uthania produce 1, 2 units cheese,
Approximate Word count = 942
Approximate Pages = 4 (250 words per page)
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