4 - Business 2/4 D. Globalization of markets The Business...

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Business 2/4 D. Globalization of markets The Business Environment Economic environment Role of government Corporate social responsibility Globalization 1.The growth of global trade and our trading partners 2.Why do nations (firms) engage in global trade No nation can produce all it wants and needs, at least not in a efficient manner. o To obtain raw materials that are otherwise unavailable o Available at a lower price somewhere else o A rare monopoly exists when a country is the Only source of an item Only producer of an item Most efficient producer of an item o Comparative advantage A country specializes in products that it can supply more efficiently or at a lower cost than it can produce other items Ex. United states wheat and corn production comparative advantage Even if a country were self-sufficient, other countries (who are not self-sufficient) would want its imports Countries differ in their relative ‘wealth’ of factors of production
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4 - Business 2/4 D. Globalization of markets The Business...

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