Comment critically on comparative advantage as a basis for international trade Essay Example for Free

Comment critically on comparative advantage as a basis for international trade Essay Comparative advantage was an idea proposed by David Ricardo in 1817, and is an idea which can be used on a variety of scales, but is most often used when analysing international trade. Ricardo used the idea of wool produced in England at a lower opportunity cost than wool is produced in Portugal relative to wine, while in Portugal wine is produced at a lower opportunity cost than wine is produced in Britain relative to the wool. This means that in Portugal it is less costly to produce wine in terms of what is the next best use of the resources involved. The reasons that this occurs could be for any number of reasons: weather, technology, productivity of workers in that industry and so on. This idea is one that all countries can benefit from, as even a tiny country will have a comparative advantage in a good relative to another good, even when trading with a world superpower. Comparative advantage is often used to look at just two countries and two goods, which is not necessarily a pitfall as the model can be applied to multiple countries and multiple goods, it is just for simplicity. Shown below is a very simple idea of the benefits produced by comparative advantage: As with any model in economics, comparative advantage is not ideal. It is a proposed model based upon a fundamental idea which has very often proved itself to be true, but it still relies on many ideals and factors that do not and cannot realistically exist. These underlying assumptions mean it is difficult to base international trade upon the comparative advantage theory. However, the comparative advantage theory is questionably a solid basis to trade, even if it cannot explain international demand and supply in its entirety. The biggest problem when it comes to how affective comparative advantage is in dictating trade is that all factors of production are assumed to be perfectly mobile, something which it is fair to say is never the case. The idea is that any factors of production, be it labour, capital, land or entrepreneurship, that these, if made redundant from one industry it is thought that these resources could immediately be transferred to another industry that has a comparative advantage over the other country. This is clearly not going to be case, unless the industries are very similar, something which contradicts another theory of comparative advantage, which states all goods are homogenous. It is therefore almost an impossibility for this to occur, for the unemployment created by a failed industry to be suddenly removed by another. Structural unemployment of people without the necessary skills to work, is inevitable. Even in the EU, where the S.E.A single market was set up in 1986, it is still difficult just to go and work in another EU country for geographic, structural and lingual reasons. The government would have to spend a huge amount on supply side policies such as very efficient schemes of education or perhaps low taxation (Thatcherite) to be able to transfer skills that quickly, and shift the long run aggregate supply curve to the right, thus reducing unemployment: Because the government realises just how unlikely and difficult it is to transfer resources, it actively discourages the failure of an industry, as shown by the EUs enormous subsidies of the farmers in this country, most notably the Common Agricultural Policy. It is therefore acting against the theory of comparative advantage, as this would dictate that the farmers move into the service sector, where Britain is very productive. This shows how politics has a great affect on trade once the industry has been established, though comparative advantage may well have dictated what industries were originally started and how they grew, even if politics has a greater effect today. The fact that politics makes a big difference in the effect of comparative advantage demonstrates another shortcoming of the theory. It assumes that trade around the world is completely free, something which is increasingly true, although the creation of the EU has meant that trade within the EU is almost completely free, while from in the EU to the rest of the world, protectionist policies are in place. There also continue to be some semi-autarkic countries such as North Korea. If cricket bats are made in both England and Pakistan, if Pakistan has the comparative advantage in making the good, in terms of Panama hats for example, consumers in the UK may well still buy cricket bats from British producers, for several reasons, most importantly that policies such as tariffs or quotas may well be in place on goods entering the EU, in which case the goods are no longer price competitive. This is shown below: However, the large sales of cricket bats in the UK may well also be for other reasons. Cricket bats are not a homogenous product, with different bats suiting different players, and other non-price competitive reasons such as a higher quality of bat made domestically or that there is better after-sale support. This is something that the theory of comparative advantage does not take into account. It may also be very expensive to transport the bats to the UK from Pakistan, making it no longer economically efficient to trade here. This is something else that is not taken into account by the model. All these things aside, the reasons why countries trade is for the benefits that arise from the trading, such as specialisation increasing output, economies of scale, innovation through competition and the welfare gains in increasing the consumers choice. It is at no stage a random process as to what goods are traded, and there are good reasons for why bananas arent grown in England and sheep arent reared in the West Indies. The productivity of a country in producing a good dictates what it will trade, and a country that is very inefficient in producing a good will move onto something to which it is more suited. There are of course cases where this is overridden by the factors mentioned, but ultimately comparative advantage theory does form a basis as the title suggests, to almost all international trade. For the trade to occur, the terms of trade are laid out, which is simplified to compromising between the opportunity cost ratios of the two countries. Once again, this is not exactly how it works, as politics and economics merge to create something slightly different, but it is highly likely to be something close to what comparative advantage suggests it should be. It is inevitable that the model does not fit the real world, but there is not a single economic theory that can be applied directly to an economy with no assumptions being made.

Abortion: Points Of View :: essays research papers

Abortion: Points of View   Ã‚  Ã‚  Ã‚  Ã‚  It is nearly impossible anymore to find someone who doesn't have an opinion about abortion, and probably a strong opinion at that. Yet the endless debates on the topic usually go nowhere, leaving the opponents even more committed to their positions and the open-minded observers confused. Both sides make a good case. An unwanted child is a pitiful thing, and the attendant social problems (single motherhood, financial destitution, child neglect, and urban overcrowding, to name just a few) do not have easy solutions. On the other hand, the thought of terminating something that, if left to run its natural course, would ultimately result in the birth of a human being gives all but the most hard-hearted among us cause for serious introspection.   Ã‚  Ã‚  Ã‚  Ã‚  One reason the debate goes nowhere is that each side focuses on a different topic. We make no progress because we are not talking about the same thing. The pro-abortionist prefers to discuss choice, and to dwell on all of the social problems inherent in an unwanted child. The anti-abortionist is interested primarily in protecting the life of the fetus. In simple terms, the pro-abortionist focuses on a woman's rights and the anti-abortionist focuses on a fetus' rights. Though interrelated, these are basically different topics.   Ã‚  Ã‚  Ã‚  Ã‚  Though neither side realizes it, there is actually much more agreement than disagreement between the opposing views. The majority on both sides would agree that social problems like child neglect and urban overcrowding are serious issues. Most would also agree that the life of a child is a precious thing that deserves the full protection of the law. There would even be nearly universal agreement that it is a woman's exclusive right to make decisions concerning her body. So where's the disagreement? The entire complex issue comes down to one question:  Ã‚  Is the fetus a person? If you believe it is not a person, then it is simply part of the woman's body and subject to her exclusive control. From this point of view, any attempt to diminish that control is a cruel infringement upon a woman's rights. If, however, you believe the fetus is a person, then you are obligated to protect it, even to the point of delimiting the actions of the woman carrying it. For you, the suggestion that this issue is a matter of personal choice is like saying that whether or not a parent kills a two-year-old is a matter of personal choice. The goal of these pages is to examine the abortion debate from several perspectives, focusing on the question of when the fetus' life as a person

Business †Accounting Essay

In the file ACC 561 Week 3 Discussion Question 1 you will find right answers on the following task: â€Å"Select a costing method: process, job, or activity based. Describe the nature of your chosen method. What types of organizations should choose that method? How is this method different from the costing methods you did not choose? Use your selected costing method to create a real-life business management scenario that includes realistic numbers. What management decisions may one make based on your scenario?† Business – Accounting Alternative Costing Methods The text presents job and processing costing systems as virtual â€Å"polar extremes,† there are many situations where it may be best for a company to use a hybrid system that combines attributes of both systems. Describe such a situation and discuss how the hybrid system may be better than either pure job or pure process systems. Think Twice Assume you own a business that makes two complementary products for which you allocated manufacturing overhead proportionally. A competitor is trying to undercut your price for one of the products. How might ABC costing help you better compete with this pending threat? Activity Base Costing- How do managers cost products or services using ABC systems? When should managers consider using an ABC costing system? How should they decide to adopt this method? Alternative Costing Methods I would like you all to select a costing method: process, job, or activity  based. Describe the nature of your chosen method. What types of organizations should choose that method? How is this method different from the costing methods you did not choose? I have implemented a job costing system in my company. If you were my corporate controller, how would you implement a job-costing system? Why is process costing a better costing method for cert†¦ Follow the link to get tutorial – https://bitly.com/12BiSuQ College is a great time for young people to find themselves and to really find out what they are made of. However, there is a lot to learn. Some students only really become comfortable at college when it’s about time to leave! Don’t let that be you. Here are some great college tips. Business – Accounting Alternative Costing Methods The text presents job and processing costing systems as virtual â€Å"polar extremes,† there are many situations where it may be best for a company to use a hybrid system that combines attributes of both systems. Describe such a situation and discuss how the hybrid system may be better than either pure job or pure process systems. Think Twice Assume you own a business that makes two complementary products for which you allocated manufacturing overhead proportionally. A competitor is trying to undercut your price for one of the products. How might ABC costing help you better compete with this pending threat? Activity Base Costing- How do managers cost products or services using ABC systems? When should managers consider using an ABC costing system? How should they decide to adopt this method? Alternative Costing Methods I would like you all to select a costing method: process, job, or activity based. Describe the nature of your chosen method. What types of organizations should choose that method? How is this method different from the costing methods you did not choose? I have implemented a job costing system in my company. If you were my corporate controller, how would you implement a job-costing system? Why is process costing a better costing method for certain industries? What would happen if they used a job costing system? Can we explain three major source documents and how they are used in job costing systems? Why are these source documents needed?

The Dual Nature of Characters in Othello Essay - 1074 Words

The Dual Nature of Characters in Othellonbsp;nbsp; In Shakespeares tragedy, Othello, Iago is uncharacteristically honest when he says I am not what I am. However, he is not the only character whose appearance differs from the reality. Nonetheless, he is possibly the only person who intends this duplicity. Unfortunately everyone is under the impression that Iago is honest and just. Once alone, Iago reveals when devils will the blackest sins put on, they do suggest at first with heavenly shows as I do now. Iago is two-faced in his relationships, even in the language he uses. After referring to Othello as a black ram, he then tells him my lord, you know I love you. Iago has no shame in appealing to heaven and godly images in†¦show more content†¦Iago often refers to Othello as the Moor and when Emilia realises how Othello has treated his wife, she calls him the blacker devil. As Iagos plan unfolds, Othellos suspicions and jealousy come to the fore. Iagos blasphemous expressions gradually infiltrate Othellos vocabulary as Othell o becomes more and more convinced that Desdemona is being unfaithful. Initially he claims that while the marriage is expected to bring him some physical satisfaction, he and his wife value their mental attraction just as highly. However, as he becomes ensnared in Iagos trap, Othello reveals a more detailed acknowledgement of Desdemonas sexual appeal. As he discusses her death with Iago, he says he will not argue with Desdemonalest her body and beauty unprovide my mind again. Othellos open-mindedness enables him to actually accuse Desdemona, although he does not believe a word of her plea of innocence. Iagos influence has made Othello violent and sarcastic. Although to the Venetian nobility around him, Othello seemed to be fairly like his usual self, his private face became his public appearance when he hit Desdemona in the presence of Lodovico. 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