Week 5 concept summary

Week 5 concept summary - The tariff reduced the amount of...

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In deciding what to export from Rodamia to other countries, I chose to export cheese over corn and DVD players over watches, because cheese and DVD players have a lower opportunity cost for Rodamia compared to the other countries. I also chose to import corn from Uthania and watches from Suntize, because these items are produced at a lower opportunity cost for them compared to others. Being able to recognize comparative advantages from the chart took a couple tries, but after completing the simulation a couple times it made more sense. After the watches were being dumped, I chose to impose a tariff of $40.00 per unit, which equals the dumping margin.
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Unformatted text preview: The tariff reduced the amount of watches being imported and increased the amount of watches being produced domestically. I also made the decision not to impose a tariff on imported corn. I made this decision because free trade is better overall versus imposing tariffs or quotas on trade. Being that Rodamia is new to international trade I thought that it would be in the countries best interest not to start any trade wars. This is also the reason why I chose to negotiate free trade with both Alfazia and Uthania....
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This document was uploaded on 12/19/2010.

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