Agribusiness management questions When economic times get tough countries often
ID: 1133719 • Letter: A
Question
Agribusiness management questions
When economic times get tough countries often revert to protectionism, The texts explain why the operation of the principle of comparative advantage is the key to economic progress, and why protection of domestic indus tries from competition reduces standards of living Guestion I, Think of an industry that you know well and consider bow open are firms in that industry to competition from intervatiowal competition Question 2, How well does the theory about free trade apply in Practice? Guestion , What about the questions of dumping and the use of non-tarff bamers to trade? Can anyone come up with some examples?Explanation / Answer
Question no. 1)
We are familiar with agro industry. But it has become matter of great discussion and discourse in internal forums. Firms in this industry are not open to international competition. Demands for such products do not rise on sustainable manner and second, competition is increasing from developing countries as well. Labor cost and raw materials are relatively cheaper in developing countries.
Hence, government offers varieties of subsidies to agro industry to stay competitive.
Questions No.2)
World economies have braced towards the free trade but still there exist so many hurdles and regulations. Complete free trade is not possible in this world. Countries are trading with restrictions and hurdles. Governments impose tariffs and non-tariffs barriers to protect domestic interests. Level of economic development is distinct across the world, hence, complete free trade would benefit some at expense of others.
Presently, world major economies are retreating from globalization to save jobs and prosperity.
Questions no. 3)
Selling product below its average cost in international market is called dumping. Dumping is predatory pricing to kill competitors present in market. Such practices compromises welfare of public in long run.
Non tariffs barriers refer to quota and regulation which restricts the volume of import or trade. Such non-tariffs actions are taken by government to deal with negative impacts of trade which cannot be handled though the tariffs barriers.
Recently USA has imposed tariffs on many products such steel from china. China was exporting some of products even below the average cost of production.