Introduction to Theories of International Trade

Introduction to Theories of International Trade In this concept there are mainly two theories that are classical theory of trade and new trade theory each differentiates from each other with different advantages, assumption and drawbacks. Exchange of goods and services on an international level between two or more countries is stated as international trade. Trade generally takes place between different companies it is of different goods and services. An import is goods and services bought by other country for local use. Example: UK imports gold, telecom equipment from India and export is the process of selling the goods and services which the host country has produced in the country more than sufficient. Example: Tea is exported to UK from India. However, government and individual person often buy and sell products and services internationally resulting international trade. Integration of the world economy is more than ever before. We participate in world/global economy by purchasing or selling goods and services in day to day lif e. Industrial equipments, oil, agricultural products, services like banking transportation, telecommunication, and tourism services are main part of international trade commonly. International transportation and communication cost has been reduced significantly resulting in greater integration between the economies of the world. The interdependence of countries can affect prices, wages, employment, and production in other country; it also affects economic trends and financial condition of each other. For prosperity countries have to work together more closely and rely on each other. Classical Trade theory: Classical theory focused mainly on occurrence of trade. The firms felt need of a separate theory due to fundamental differentiation of internal trade. These theories feature the variation in comparative benefit of manufacturing commodities of 2 countries to the diversity in the manufacturing competence of workers in that particular country it is focused on single value prices. Factor price differences are never considered in this theory. There are several sub theories in this particular concept which is explained as followed. (Sinha, n.d.) Absolute advantage Theory of trades (Adam smith, 1776): In the 2nd part of the 18th economic progress got complicated due to mercantilism policies. In the book The Wealth of Nations published in 1776 author Adam Smith stated that mercantilism theory favors the producers and reduces the interest of the consumers. Adam smith says in his theory that exports are profitable but countries should also import goods and services to satisfy better requirements of consumers instead of making them here in internal market. As we can see in the figure 1, country 1 has absolute advantage in good A production/resources and country 2 has absolute advantage in good B production/resources so country 1 should export good A to country 2 and import good B from country 2 vise versa. (Anon, n.d.) Figure 1: Absolute Advantage (Absolute Advantage n.d.) Assumptions of absolute advantage theory: Trade between two countries for two commodities: If we take three or more countries it does not help analytically for absolute advantage theory. Efficiency of the product: Countrys goal is not always efficiency comparing at the level of the world it is not easy to produce efficient product every time. Zero transportations cost: Transportation cost is not considered in absolute advantage theory. Factor mobility/immobility: Theory presumes that all the resources are mobile in the country and immobile between two or more countries. Total employment: Theory considers that every country has full employment in the whole country. (Anon, n.d.) Comparative advantage Theory (David Ricardo, 1817): This theory of David Ricardo states that both the countries involved in trade can gain a lot even if one of the countries is producing less than all goods and services that produced by other country. As can be seen in the graph below country B is producing more than country A in both the goods that is produced in both countries. Both the counties should specialize in what there is low opportunity cost is required. (Anon 1, n.d.) Figure 2: Comparative Advantage (Comparative Advantage n.d.) No or low transportation cost: consideration of the transportation cost is not even taken in this theory also. No negative externalities: theory does not say about externalities affecting trade, and it also does not take into consideration that there could be negative externalities for more production. (Anon 2, n.d.) There are no economies of scale: Due to different policies of government for particular country it becomes hard to trade freely and affects the total production and eventually affecting to the scale of economy. (Anon 3, 2008) Mercantilism Theory (16th century): Mercantilism theory is a thinking of 16th century. Major trading nations were thinking that if we increase our exports internationally we will gain power, wealth and also the precious metals like gold and silver in return. The theory says that in total world there was only fixed wealth which will increase our countries wealth resulting in becoming powerful country through either importing or exporting the goods in high quality but in lower cost. Earlier days transactions was use to take place in the form of either in gold or in silver coins which created trend of exporting more and importing less is called as mercantilism. (Anon1, n.d.) Mercantilism is time bounded; it is short term because after some period of time resources will be over due to large no of use of the raw material. Then countries will have to import the same good to their own country. Certain goods should be imported by any country to avoid later effect of scarcity for any goods and services. (Anon 4, 2008) Factor Endowments Theory (Heckscher in 1919, Ohlin in 1933): In this theory both Swedish economists Heckscher and Ohlin have different view/explanation about comparative advantage. They both think that comparative advantage comes from difference in national factor endowments. Factor endowments means the scope of the country is endowed with resources like land, labor, and capital, workforce, and infrastructure. Different countries have different factors endowed, and different factor endowments explain differences in factor costs. To lower the cost the factor should be more profuse. This theory proposes that the nations would export those goods that makes demanding use of those factors that are locally more in numbers, and should import those goods those have scarcity locally. (Aswathappa, 2010) New trade theory: This theory endeavor to comprehend and give details of the global trade affect the diversity of goods accessible to consumer around the world, these theories also describe concentration of market structure. Analysis of Trade: The testimony brings the awareness that the trade between India and U.K has historical trade relations. Indias exports to U.K was beneficial to both countries as U.K use to import raw material and make it into finished goods and again export those products to other countries. According to the survey it is observed that India had good revenue when the exports were high to U.K but as India moved towards diversification the exports of the country started declining since the year 2000. Both countries are the top investors in the economies of each others economies, this enables long term benefits to both countries. (Anon 5, 2012) Exports of India: The current situation of Indias exports shows positive sign on the trade i.e. exports of the country was worth 23698 million USD. In the GDP 22% of exports is been contributed, out of which jewelry constitutes 16% of contribution in exports. Mainly India exports to U.S, European Union, China Arab Emirates. (Tradingeconomics 1, 2012) Exports of U.K: The current market situation of U.K according to the records is 40. 5 Billion GBP in September 2012. This country is considered as fifth largest nation. The main export of U.K is telecommunication equipment, aircrafts, automatic data processing equipment etc. U.K mainly exports goods and services to Ireland, USA, France and Germany. (Tradingeconomics 2, 2012) Positive impacts of International trade on India and U.K: The growth of India rose above 6% after the year 2000. Overall employment also increased from 1% to about 3% which is beneficial to the economy. Liberalization of trade policies enabled to bring efficiency in several terms. Improved standard of living of the country. (Sankaran, Abraham, and Joseph, n.d.) Increase in possible growth of the business. Expand market share globally. Enables steady variation of market.(Economywatch, 2010) Protectionism of trade theory: This concept came into existence in order to protect the interest of the country who is involved in international trade. Here government protects the firms from exploitation of other countries. Typical method of protectionism is direct state intervention, subsidies, tax cuts to local business, quotas and tariffs. These are main types of protectionism method used by the government. Merits of protectionism: Protectionism of international trade helps protecting the local organization and employment. With help of reduction in imports economical aggregate demand will increase. Country can develop some laws to avoid dumping. Foreign companies bring their products and sell them in lowest price than the production cost. Protectionism helps in developing new domestic firm to grow faster blocking the foreign company to develop locally. (Gulrajani, 2009) Demerits of protectionism: Innovation and improvement will become weak as there will not be much of competition due to protectionism. Dismissal and burnout will be the ultimate result of protectionism. Lower or bad quality might dissatisfy the customers because of long term protectionism. Redundancy can become serious issue due to less innovation or improvement. Protectionism affects the countries economy and also the world economy. Many countries are now avoiding protectionism ad they are favoring more of free trade agreements. (Anon 8, n.d.) Analysis of Comparative Advantage: At a lower opportunity cost when a country produces goods and services when compared with other country that particular country is said to have comparative advantage. (Economicshelp, n.d.) Comparative advantage of India: India has huge population therefore this particular country has good labor and so it is specialized in labor intensive product. This capability differentiates themselves from other countries, and makes maximum use of it in order to make maximum profits which would add to host countries economy. (Tradingeconomics 3, 2012) Comparative advantage of U.K: U.K is vast country therefore they are specialized in several goods but mainly the comparative advantage of this country is manufactured goods i.e. is pharmaceutical products, telecommunication product etc. the quality provided by this country for these country makes product outstanding also the technologies use to manufacture these product ensure efficiency in goods that exported. (Economicsonline, n.d.) Criticism to Comparative advantage: Even if the countries do not have clear comparative advantage, they aim to take risk by broadening there horizons for goods and services. The assumption of two country and two goods is incorrect as the real world is too complex by exporting and importing different services and goods. This concept is not constant i.e. it can change over a period of time. In this concept exchange rates and relative prices are not taken into consideration. Structural unemployment is possible if there is complete specialization as there are some cases where workers cannot transfer from one sector to another. Without any diminishing return this concept is perfectly mobile. (Economicsonline, n.d.) Conclusion: International trade and investment is constituted by economic relation. This irregularity is embedded in a situation where prosperous countries are impatient to stipulate free trade for others but are hesitant to compel it on themselves and are capable to evade doing so. The current market of international trade promotes growth and aims to reduce poverty. Different theories have different assumptions but the modern theory is considered to be more effective then the other as it focuses on both i.e. exports as well imports. The protectionism concept is effectively being used by the countries in order to avoid exploitation and also ensures smooth going in trade.

Imprisonment and Social Control Essay -- Prison Justice

Imprisonment is one of the primary ways in which social control may be achieved; the Sage Dictionary of Criminology defines social control as a concept used to describe all the ways in which conformity may be achieved. Throughout time imprisonment and its ideas around social control have varied. Imprisonment has not always been used for punishment, nor has it always thought about the prisoners themselves. However when looking at imprisonment it is important to consider the new penology. Therefore, it needs to be clear what the new penology is. The new penology is said, not to be about punishing individuals or about rehabilitating them, but about identifying and managing unruly groups in society. It is concerned with the managerial processes, not the individual’s behaviour or even community organisation. All in all, its goal is to make crime tolerable, not to eliminate it entirely. (Feeley, M and Simon, J). Therefore the New Penology is not about the reform of individuals but the control of populations as a whole, with imprisonment focusing on particular offenders who are defined as ‘persistent’ or ‘high rate’. In light of this, the history of imprisonment, the purposes of imprisonment and indeed the question of whether it works as a form of social control or not all need to be addressed, as well as looking into the critics of the new penology. Imprisonment has a number of purposes, the first being punishment, which brings with it the idea of retribution and revenge. The second purpose is incapacitation, this looks at the protection of society and the length of time the individual must serve in prison. Deterrence is the third purpose; it attempts to prevent the individual committing any future crime and goes some way to deter ... ...ology. Devon: Willan Publishing, pp 684-713. Sampson, R, and Laub, J. (1933), ‘Individual Factors in Crime’, in Newburn, T. Criminology. Devon: Willan Publishing, pp. 843. Shichor, D. (1997) ‘Three Strikes as a Public Policy: The Convergence of the New Penology and the McDonaldization of Punishment’, Crime Delinquency, (43), pp. 470-492. Spelman, W. (2000) ‘What Recent Studies Do (and Dont) Tell Us About Imprisonment and Crime’. In Michael, T. Crime and Justice: A Review of Research. (3). Chicargo: University of Chicargo Press. Wilson, D. (2006) ‘Social Control’, The Sage Dictionary of Criminology: 391-392. London: Sage Publications. Woolfe, H. And Tumim, S. (1991). ‘Official Aims of Imprisonment’, in Cavadino, M. and Dignan, J. The Penal System: An Introduction. London: Sage Publications. Zedner, L (2004). Criminal Justice. New York, USA: Oxford University.

L’Oreal Case Study

1) Using the full spectrum of segmentation variables, describe how L’Oreal has segmented the Indian market From our understanding, L’Oreal made a statement for market â€Å"We don’t do poor products for poor people,†. L’Oreal reduce their price for hair dye, which is $2. 70, and small shampoo packets below $1 in order to compete with local brands. So, L’Oreal had change their segmentation from upper class intourban middle-class. Previous reputation, L’Oreal had losses over 13 years in Indian market.L’Oreal determine that 60 million people who earn $270 per month. Therefore, L’Oreal have to reach this niche market in order to gain back sales. 2) What segment(s) is (are) L’Oreal now targeting? How is L’Oreal now positioning its products? How do these strategies differ from those employed by its competitors in India? L’Oreal targeting the niche market, which is urban middle-class. L’Oreal reduce t he price and offering the product that suitable to the urban middle-class market.L’Oreal advertise their hair care product, by using the billboard across India, where indian women tugging on her braid which is stretched across freeway overpasses and along length of the bus. It show the uniqueness of their products and creativity of advertising, in the same time meet the customer needs. 3) What role, if any, does social responsibility play in L’Oreal targeting strategy in India? L’Oreal consider to reduce their price of some product that suitable to their new target market.Plus, L’Oreal would like to offer their cosmetic product to their new target market in order to fulfill their needs and wants. 4) Do you think that L’Oreal will accomplish its goals in India? Why or why not? L’Oreal will able to accomplish their goal if they keep maintaining the price that suitable for urban middle-class income and also expand their target market to reach m ore segments in India market. 5) What segmentation, targeting and positioning recommendation would you make to L’Oreal for future marketing efforts in India?In order to survive, L’Oreal need to identify the differentiation of each segments, accessible of the segments to buy L’Oreal product, offer unique products, and durability of product due to changes in economic. L’Oreal need to build a product based on their target market, which need meet their needs and wants. L’Oreal also need to be more creative to promote their product that reach each segements. L’Oreal needs to build or expand their outlet to reach the target market. L’Oreal needs to understand the lifestyle each target market. L’Oreal Case Study 1) Using the full spectrum of segmentation variables, describe how L’Oreal has segmented the Indian market From our understanding, L’Oreal made a statement for market â€Å"We don’t do poor products for poor people,†. L’Oreal reduce their price for hair dye, which is $2. 70, and small shampoo packets below $1 in order to compete with local brands. So, L’Oreal had change their segmentation from upper class intourban middle-class. Previous reputation, L’Oreal had losses over 13 years in Indian market.L’Oreal determine that 60 million people who earn $270 per month. Therefore, L’Oreal have to reach this niche market in order to gain back sales. 2) What segment(s) is (are) L’Oreal now targeting? How is L’Oreal now positioning its products? How do these strategies differ from those employed by its competitors in India? L’Oreal targeting the niche market, which is urban middle-class. L’Oreal reduce t he price and offering the product that suitable to the urban middle-class market.L’Oreal advertise their hair care product, by using the billboard across India, where indian women tugging on her braid which is stretched across freeway overpasses and along length of the bus. It show the uniqueness of their products and creativity of advertising, in the same time meet the customer needs. 3) What role, if any, does social responsibility play in L’Oreal targeting strategy in India? L’Oreal consider to reduce their price of some product that suitable to their new target market.Plus, L’Oreal would like to offer their cosmetic product to their new target market in order to fulfill their needs and wants. 4) Do you think that L’Oreal will accomplish its goals in India? Why or why not? L’Oreal will able to accomplish their goal if they keep maintaining the price that suitable for urban middle-class income and also expand their target market to reach m ore segments in India market. 5) What segmentation, targeting and positioning recommendation would you make to L’Oreal for future marketing efforts in India?In order to survive, L’Oreal need to identify the differentiation of each segments, accessible of the segments to buy L’Oreal product, offer unique products, and durability of product due to changes in economic. L’Oreal need to build a product based on their target market, which need meet their needs and wants. L’Oreal also need to be more creative to promote their product that reach each segements. L’Oreal needs to build or expand their outlet to reach the target market. L’Oreal needs to understand the lifestyle each target market.

Free Essays on The Yearling

After the Civil War many men moved to the scrubs. One of those men was Penny Baxter, who moved to a place in the scrubs called Baxter’s Island. He settled there and started a family. He had a wife who goes by Ma, and a son named Jody. Jody’s maturity is shown throughout one year, through different events, in the novel called The Yearling. In the early stages of the book Jody spends his time avoiding his chores, and having fun instead. â€Å"He [Penny] was doing Jody’s work, and in his good coat†(9). Although, it seemed not always to be Jody’s fault that he did not do his work, but some blame could be put on Penny. â€Å"’Men-folks has got to stick together in the name o’ peace’†(11). Penny remembers what it’s like to be a kid, there is just one rule, to act like a kid. Jody did eventually mature enough to do his chores around the house. â€Å"’ Look at him [Jody] move,’ his mother said. ‘To see him hoe, you’d think he was a snail. Say â€Å"huntin†Ã¢â‚¬â„¢ ‘ and he’s as quick as an otter’†. (29) Besides hunting, something else motivated Jody to be responsible; Flag. Flag was a fawn that Jody found and raised by himself. Jody was extremely proud of Flag, although Flag was a bit rambunctious toward the end of the book, ruining the only crops the Baxter’s had to eat. This was a serious matter because there was no more hunting to be done at this point, hunting season had ended and the crops and the little meat were suppost to get them through the winter. Throughout the past year, Jody is maturing with each coming day. Different events also guided Jody on the right path to becoming a man. For instance, the death of Fodder-wing. This was a horrible tragedy in this story, yet w if it had not happened, Jody would not have had that motivation to take on more responsibility as he grew older. â€Å"’I come to see Fodder-wing. I come to show him my fawn’. . .’Buck said, ï ¿ ½... Free Essays on The Yearling Free Essays on The Yearling After the Civil War many men moved to the scrubs. One of those men was Penny Baxter, who moved to a place in the scrubs called Baxter’s Island. He settled there and started a family. He had a wife who goes by Ma, and a son named Jody. Jody’s maturity is shown throughout one year, through different events, in the novel called The Yearling. In the early stages of the book Jody spends his time avoiding his chores, and having fun instead. â€Å"He [Penny] was doing Jody’s work, and in his good coat†(9). Although, it seemed not always to be Jody’s fault that he did not do his work, but some blame could be put on Penny. â€Å"’Men-folks has got to stick together in the name o’ peace’†(11). Penny remembers what it’s like to be a kid, there is just one rule, to act like a kid. Jody did eventually mature enough to do his chores around the house. â€Å"’ Look at him [Jody] move,’ his mother said. ‘To see him hoe, you’d think he was a snail. Say â€Å"huntin†Ã¢â‚¬â„¢ ‘ and he’s as quick as an otter’†. (29) Besides hunting, something else motivated Jody to be responsible; Flag. Flag was a fawn that Jody found and raised by himself. Jody was extremely proud of Flag, although Flag was a bit rambunctious toward the end of the book, ruining the only crops the Baxter’s had to eat. This was a serious matter because there was no more hunting to be done at this point, hunting season had ended and the crops and the little meat were suppost to get them through the winter. Throughout the past year, Jody is maturing with each coming day. Different events also guided Jody on the right path to becoming a man. For instance, the death of Fodder-wing. This was a horrible tragedy in this story, yet w if it had not happened, Jody would not have had that motivation to take on more responsibility as he grew older. â€Å"’I come to see Fodder-wing. I come to show him my fawn’. . .’Buck said, ï ¿ ½...

Ancient Greek Architecture essays

Ancient Greek Architecture essays The Ancient Greeks constructed magnificent architecture. They had three main styles; Doric, Ionic, and Corinthian. Doric was the least ornate and Corinthian was the most. The majority of their architecture was done in the Doric style. Six of the Greeks more important structures are the Parthenon, Erechtheion, Herodeion, Temple of Zeus, Treasury of Athenians, and the Temple of Hephaestus. The Parthenon, a well-known and once impressive temple, sets on a hill called the Acropolis. The Acropolis became the religious center of ancient Athens, and it was on this hill that the Greeks built the Parthenon almost 2,500 years ago. They built the Parthenon to honor Athena Parthenos, the pagan goddess of Athens. Athena was the Greek goddess of wisdom and also the Warrior Maiden. The city of Athens was named in her honor. Inside the temple stood a giant gold and ivory statue of Athena. Today the Parthenon is old and crumbled but there is something about it that takes you back to the glory days of ancient Greece. The Parthenon is the biggest temple on the Acropolis and was considered a great beauty in her day. It is square shaped with 8 columns going across each end and 15 along each side. Inside, people can only imagine the once magnificent gold and ivory statue of Athena. The Parthenon had a roof of two skewed sides with a triangular space underneath each end so that carvings of gods and goddesses could be placed inside. An inner border of carvings shows a parade of Athenians including warriors, women, and priests. Ictinus and Callicrates designed the Parthenon with sculpture work done by Phidias. It is made completely of white marble and surrounded by large standing columns. The temple had two rooms inside its cella, the encased space inside the colonnade. The smaller room was dedicated to the goddess Parthenon and in due time the whole building was named aft...

Biological Influences-U2-IP Essay Example | Topics and Well Written Essays - 500 words

Biological Influences-U2-IP - Essay Example So the mind received the maximum effect of coarseness and sent stimuli to feel that. After a minute or two (not for a long time) if again rubbed, the time is not sufficiently large enough to forget the coarseness of the sand paper. This time the sand paper was rubbed with index finger having a perception about its coarseness. This type of adaptation of the mind to the situation decreases its extent of stimuli and as a result the perception of coarseness is up to less extent when the sand paper was rubbed for 2nd time. Here the adaptation was evident by touch.Take two cups of water.The first one will be sugar mixed water and the second with fresh water. Now the sip of the sugar mixed water was taken and swished around in the mouth for some time.This action made the water to mix with saliva in the mouth.As a result the sweetness of it was decreased. Another factor also may contribute to the decrease of sweetness of the sugar water. (When swished (liquid) or chewed (solid) the sugars in the substance will be disintegrated to smaller molecules of sugar and the carbohydrates also to the level of smaller molecules of sugar.This makes the sweet food to taste less sweet and the carbohydrate food a little bit sweeter after chewing it for some time.)By the time the sugar water tastes less sweet than its real taste the taste buds were adapted to its sweet taste.

International Production and Trade Essay Example | Topics and Well Written Essays - 750 words - 2

International Production and Trade - Essay Example Dumping has led to development and enactment of various rules and regulations for international trade to foster more cooperation among different countries. Lack of proper and comprehensive and binding international trade regulations, tensions between trading partners are likely as states try to maximize domestic gains from trade, often at the expense of trading partners’ welfare. Chapter six of the notes also deals with selling products from one country to a different country, is likely to affect the domestic business and trade in the importing country. This requires the government to formulate laws and regulations to enable a level playing ground for all players in the business, both local and international trade. International traders are likely to bring in cheaper products and services that are likely to disrupt the demand and supply of the business environment and will greatly affect the sales in of the local businesses, thus leading to losses and loss of jobs in the count ry. There is need to have in place regulatory measures to ensure there is a level playing field and that international trade does not affect the local businesses in the negative way (Fried 34). ... WTO ensures that all the rules and agreements entered in to by various countries are observed to the later and the countries failing to follow the rules will be punished through appropriated sanctions from the body. Chapter six also discusses the various perspectives of international trade. The three main perspectives of international trade include the Liberals, mercantilists and structuralists, who have different views and opinions regarding to how trade should be conducted on the international scene. For liberalists, international trade should be conducted using the ideas of thinkers such as ideas of Smith and Ricardo, who give various conditions within which the trade can flourish on the international arena. In Ricardo’s theory of comparative advantage, he provided liberal ideas about how trade can flourish between countries using their strengths and weakness in terms of their production of goods and services. According to both Ricardo and Smith, global trade should not be based on who can produce the most of any give product, since this can be disadvantageous for businesses due to the limitations of scarce resources. This limitation means that no particular country can produce as much as it wants of all goods and services; opportunity cost must therefore be considered. Absolute advantage cannot therefore be relied on as a policy for international trade. On the other hand, comparative advantage is the best policy because it allows countries to produce whatever they can produce efficiently and then getting the other products from other countries or businesses that also have a comparative advantage in the production of such products and services. According to