Limitation of International Trade

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Recommended: Define opportunity costs

Limitation of International Trade One limitation of International Trade is "dumping." The Investopedia states that, "dumping in international trade occurs when one country exports a significant number of goods to another country at prices lower than in the domestic market (Investopedia. 2010)". For example, if a country decides to sell exported products cheaper than it does to its residents, the process is known as dumping. Romadia has to decide whether to impose tariffs, or set a quota on its import products. Dumping has created a probability that an adverse effect can happen because the result of the adverse effect is a shortage and increases in the prices of the products. Price increases lower the demand for the products. The country’s growth progress hindered because dumping is hurting those countries competing. Four Key Points The four points from the simulation are the supply and demand of the items and the cost factors that came with cheese, corn, watches, and DVD players; the balance of trade; opportunity cost; and dumping. This means that the supply and demand of the items and the cost factors were cheap to receive the items and have the items imported in than to make them locally. The balance of trade was discussed in the simulation. The balance of trade is the difference between what goods a country produces and how many goods the buys from overseas. For example, it was the difference between the value of the goods from Uthania and Alfazia exports and the value of the goods to Rodamia imports. The concept of opportunity cost provides for differences in comparative advantage among countries because it is the cost of passing up the next best choice when making a decision. Each county has a different mix of ... ... middle of paper ... ... trade derives from being strong-minded against trade, not concerns based on ideological concerns. Works Cited Investopedia (c) 2010. Dumping. Retrieved from http//www.investopedia.com/terms/d/dumping.asp. Retrieved on August 18, 2010 Lee. Dwight R. "Comparative Advantages Continued" The Freeman:Ideas on Liberty-October 1999. Retrieved from www.http\www.CommonSenseeconomic/Reading/ComparativeAdvantage. Carbaugh, Robert, Wassink, Darwin. (1992). International dumping: final and intermediate products. Retrieved on August 19, 2010, from http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6W53-45JK7H1-1M&_user=10&_coverDate=07%2F01%2F1992&_rdoc=1&_fmt=high&_orig=search&_sort=d&_docanchor=&view=c&_searchStrId=1436752361&_rerunOrigin=google&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=68fed43879d5ff1560c8af4c96253305

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