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Economics International Trade
Transcript of Economics International Trade
Comparative advantage- When a firm or business makes goods and/or services at a lower opportunity cost than other firms or businesses.
Absolute advantage-The ability of a country or company to produce a good or service at a lower cost per unit than the cost at which another company produces that good or service.
Imports and Exports
3 Biggest Imports
Trade relationship with the United States
Switzerland is currently the United States' 21st largest trading partner in goods,showing the countries' long history of cooperation. Switzerland was the United States' 14th largest goods export and 15th largest supplier of goods imports in 2013. U.S. goods and services trade with Switzerland totaled $100 billion in 2012 . Exports totaled $53 billion; Imports totaled $47 billion. The U.S. goods and services trade surplus with Switzerland was $6 billion in 2012.
Economics International Trade in SWITZERLAND
By: Treyvon Brown
A comparative advantage gives a company the ability to sell goods and services at a lower price than its competitors.
The United States produces 700 million gallons of wine per year, while Italy produces 4 billion gallons of wine per year. Italy has an absolute advantage because it produces many more gallons of wine (the output) in the same amount of time (the input) as the United States.
Absolute advantages means a business can produce a product or service using a smaller number of inputs or using a more efficient process than other businesses.
Company XYZ and Company ABC both make wood chips. Company XYZ is located in Oregon, where lumber is in abundance; Company ABC is located in Death Valley, California, where lumber is scarce.
Company ABC must spend more money than Company XYZ to make wood chips because it has to bring wood in from other states. Due to its location and resources, Company XYZ has a comparative advantage to Company ABC.
Imports- goods or services brought into one country from another.
Exports- goods produced in one country are shipped to another country for future sale or trade.
Imports to Switzerland
Exports from the US
Switzerland's 3 Biggest Exports
2. Packaged Medicament
3. Human and Animal Blood
2. Packaged Medicament
Switzerland's main trading partners are European Union members, Germany, Italy and France. In 2009, 59.7% of exports went to EU countries, and 78% of the imports came from EU states.
Switzerland exports a lot of gold because it has one of the largest gold mining industries in Europe. They also have a high turn out for blood donations and have many pharmaceutical plants that create medicine.
Switzerland imports gold to use in the jewelry making and watches that are produced. They also import more packaged medicament, because the large pharmaceutical companies that are located there. Also, cars are imported for public sale for transportation and other automotive purposes.
Tariffs on European union members are generally low, and have no quantitative restrictions, anti-dumping, countervailing or safeguard actions. These countries are beneficial to Switzerland as trading countries.
Free Trade- Agreements
Article from Economy Watch
By: EconomyWatch Content Date: 18 March 2010
Switzerland maintains close trade relations with the European Union members, which has resulted in creating trade agreements over the last four decades, including The Free Trade Agreement. In 1972, It was intended to create a free trade zone to dismantle quotas and customs for industrial products between countries.
What are the benefits?
Switzerland, is a country located in Europe, bordered by Italy, Germany, and France., Despite a small area, the nation has a population of 7,604,467. The Swiss economy is modern and diversified, supported by an efficient system. The nation has one of the most flexible and competitive economies in the world due to its openness to international trade. Switzerland economy survived the global financial meltdown and its government has economic positions like low tariff rates.
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