a) Mercantilism According to the Mercantilism theory, In India Export is more than Import and it is

In “On Buying Local” Katherine Spriggs shares her views on the buying local products is better than the imported items for positive environment and local industrial impact. The author explains about the benefits of buying local and their advantages on the local economy and other fields. She highlights some views of the products which can be good for small farms and small rural economics. The argument given by the writer is that small farms are totally opposite than the large farms as they grow crops according to the seasons. Moreover, local buying has negative effects also as it hurts the poor workers like if everyone buying locally then people avoid the global market and the workers work in global markets can lose their jobs also. On the

208). The international market had an increasing need for reliable and homogenous product, resulting in nearly identical practices on farms throughout the country (Losch, 2002, p. 208). When Côte d’Ivoire became independent, it resulted in a dramatic spike in production that would help make the country become a market leader (Losch, 2002, p. 208). By the 1980s, the cocoa sector had been received the local government’s blessing and gained a reputation for quality mass production (Losch, 2002, p. 210). This reputation was well-merited; Côte d’Ivoire has supplied almost 50 percent of internationally traded cocoa since the 1970s and continues to do so to this day (Losch, 2002, p. 206).

1. Country A is extremely efficient in the mining of tin. However, its climate and terrain makes it difficult to produce corn. According to the theory of comparative advantage, Country A should:

As most already know, the Swiss are renowned for their production of high quality chocolates including those of the Toblerone and Lindt brands. “Switzerland has a comparative advantage in the production of chocolate. By spending one hour producing two pounds of chocolate, it gives up producing one pound of cheese, whereas, if it spends that hour producing cheese, it gives up two pounds of chocolate. Thus, the good in which comparative advantage is held is the good that the country produces most efficiently (chocolate). Therefore, if given a choice between producing two goods (or services), a country will make the most efficient use of its resources by producing the good with the lowest opportunity cost, the good in which it holds the comparative advantage, and by trading for the other good.” (Globalization101.org, 2010)

In the short term, we can see the positive effects of local production and consumption for economic prosperity. (Source A) Under different circumstances, this method has proven far more effective than our current model. Moreover, our economics have transcended to a global scale. Our countries thrive off international trade. Entire companies have built themselves by providing high quality food in correlation

The Brazilian acai berry has been a food staple for low income families for years and a cultural symbol for generations. This berry is vital in Brazil, where it is farmed and, until recently had a relatively small market. However, after an Oprah interview the demand for acai has become an international affair. The rising demand has created a free market; however the once inexpensive food staple has become too expensive for the low income families. This report will analyse the current markets advantages and disadvantages, followed by two possible government intervention models. The examined interventions will be export tariff and price ceiling.

In such condition there is no place for industry, because the fruit therof is uncertain, and consequently, no culture of

As a simple definition, The East India Company originally began as a private company with which Queen Elizabeth I granted a trade monopoly with the East Indies. This company soon grew to be a company like no other and became almost sovereign in its powers. Due to the greatness of this Company, it had many opposers- the most well known, not to mention the most outspoken, of these being Adam Smith. He opposed the East India Company’s practice of mercantilism as he believed that it took away many of the liberties of man and only benefited the select group of people who were in the upper classes of society. Adam Smith believed strongly in the idea of “Laissez Faire” economics- in other words he believed that the government should simply leave free enterprise to shift for itself. To Smith, the East India Company represented everything that he was against. The government granted this Company a monopoly and other economic privileges that caused a great interference to the natural course of the free market system. In addition, the Company showed continuously that its interests were not for the good of the people, but for the wealth of the Company. Unsurprisingly, Smith was was not alone in his dislike of the Company, as a matter of fact, the society in which he lived shared much of his animosity for the East India Company. Many in this society shared the belief that the Company’s monopoly and corrupt economic privileges were harming the economy and depriving workers of their

In addition, it helps to optimise the configuration and utilisation of global factors. A country’s production is limited by its factor

Michael Porter investigated why nations have a competitive advantage in specific industries his findings saw two basic types of competitive advantage that firms could pose low cost or differentiation. If you combine the two types of competitive advantage and allow room for a way in which firm wish to achieve them this will lead to three generic strategies which will achieve higher average performances in industries: cost leadership, differentiation and focus.

for fruit and vegetable import (Expert 2). This claim is consistent with the findings of Altieri (2005).

As shown by Exhibit 7, the price of banana in the world market declined from 1992 to 1994. This could be due to the fact that EU import restrictions forced most of Chiquita’s produce found its way into the US domestic market thereby depressing the prices here. This dealt a double blow to Chiquita as this meant its margins in the US domestic market were reduced thereby affecting its revenues.

As with any other commodity, especially one that must be grown, there are obstacles to trading such a commodity. “The export of Shea from West Africa has seen a spectacular expansion over the last 10 years: An increase of over 600%. However, the sector still must overcome issues including variable Shea butter quality, rudimentary production processes and low awareness among international buyers (West Africa Hub Annual Report).” This low awareness of the product can serve as a major obstacle to trade. With the product only being marketed in Africa, the butter will have uncertain prices and production may not be as high as it would if it were being produced and sold on the international market. As more people become conscious of the unique properties of Shea butter, the demand for this product increases. This gradually increasing demand can place a strain on the trees and these trees have unpredictable yields, with one year producing an excellent yield and the other a poor yield. Because Shea butter is a relatively recent discovery to the cosmetic industry, Western cosmetic companies are only now beginning to realize the potential of the product. The way the Shea butter is produced from the nuts can also hamper the potential of the product being traded on a large-scale and at the international level. The butter if produced fully by hand to ensure a high quality, but this requires several hours and therefore it will take a considerable amount of time to

Economists use the term absolute advantage when comparing the productivity of one person, firm or nation with that of another. The producer that requires a smaller quantity of inputs to produce a good is said to have an absolute advantage in producing that good (Gans, King, & Mankiw, 1999).

The concept of absolute advantage is one of the most fundamental areas of concern in the study of economics. In its basic meaning, absolute advantage refers to the ability of one individual or party to produce more of a particular good or service than other competitors given the same amount of resources. In this regard, absolute advantage becomes a very important aspect in the concept of international trade as it clearly defines the different areas where countries should specialize in order to maximize their productivity and enhance international trade. The principle of absolute advantage was first elucidated by Adam Smith in his study of international trade using labor and capital as the only factor inputs(Free, 2010).