you will apply your understanding of comparative advantage as a foundation for t
ID: 387583 • Letter: Y
Question
you will apply your understanding of comparative advantage as a foundation for trade, along with your understanding of the crucial concept of changes in supply and demand equilibrium. You will also provide a rational approach to how cultural differences and the downfalls of stereotyping people from foreign cultures and misunderstanding their cultural attitudes affect international trade.
Considering what you have learned about comparative advantage and relative marginal opportunity costs, discuss the advantages and disadvantages to all involved parties (American workers, American consumers, foreign workers, and foreign consumers) of continued importation and acceptance of foreign made goods into U.S. markets.
b. Compare and contrast the advantages and disadvantages of instituting an import tariff, as opposed to an outright ban on the importation of certain goods into U.S. markets.
c. In considering the foreign trade issue, discuss the benefits and challenges for Americans in understanding the cultures of the citizens of the various trading partner countries from which we import inexpensive goods that in the past were manufactured domestically. Especially include your thoughts on news media’s use of derogatory comments like “sweat-shop” conditions.
d. Discuss the importance of your ability to understand and accept cultural differences in a global context. What recommendations would you suggest to increase American understanding and acceptance of foreign cultures?
Explanation / Answer
b. The imposition of an import tariff or banning the import altogether will help the American producers as they will be shileded against the competition coming from foreign shores in form of cheap goods, and will be beneficial for the domestic workers who will benefit due to creation of more jobs locally. On the other side, the high tariff will drive the prices of imported commodities up, particularly those which are not produced domestically. Since trade is a bilateral process, the other countries will also impose tarriffs against the US goods thereby causing difficulty for the US proucers to sell their products outside. All in all, such move needs to be taken after much deliberation on the scale and selectivity.
c. The benefits to the US corporations in importing or contract manufacturing of goods lies in lower cost of manufacturing owing to cheap labour and low overhead costs. By understanding the cultures of the overseas trade partners, the US corporations will be able to know their social and economical issues well and manage the overseas operation in such a way so as not to allow discrimination and exploitation happen, provide fair wages and good working conditions, without sacrificing on the low cost nature of operations. This calls for an skillful way to strike a balance between the quality and cost effectiveness of work, and ethical ways of managing operations.
d. Cultural differences are bound to happen in this globalised economy where people from different cultural and ethnic backgrounds work at a single place or companies from across the globe set up shops at different places. For being successful, the cultural tolerance and acceptance is necessary among the individuals and organisations. A business with due consideration to cultural attributes, respect for locals and their customs, deep knowledge of their ettiquettes, social behaviour and assimilating these attributes within the business is more likely to be successful on foreign shores. Some ways of doing so are listed below.
(i) Provision of cross cultural trainings to the employees preparing to work offshore.
(ii) Make diversity a part of organisation's culture, so as to minimise the biases on the grounds of race, ethnicity, language, food habits, choice of costume etc,
(iii) Make cross cultural tolerance a part of school curriculum and a part of society's viewpoint to produce global citizens.
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