International Trade And Food Marketing Flashcards
What are the trends in International Trade in Food &Agricultural Products?
• The share of Food trade is falling but the volumes are increasing.
• Food’s share of world economic output is falling too.
• Food’s share of economic output (GDP) in developed
countries is less than 5%
What do developed economies contribute to developing countries?
- Highly food self sufficient and create surpluses that are exported to developing countries, which are not quite self sufficient.
- Developed countries dominate the international food trade.
Who is International Trade mainly handled by?
International trade in finished goods is mainly
handled by multinationals
These companies locate in particular countries
• to produce a product cheaper or better than competing producers
• to manage trade protectionism to their advantage • to better distribute finished products
What is meant by International Trade?
• International trade - exchange of goods & services between
buyers & sellers across national boundaries.
• Trade encourages more efficient production by allowing specialization
What are the International Competitiveness &Trade Benefits?
- More Choices & Better Food Products
- Improved Competitiveness of the Food System: Fosters competition among companies
across country borders.
3.Efficiency of Production: An industry in a particular country becomes internationally competitive by not only using cheap local factors of production such as land and labour
What is the Balance of Trade?
The balance of trade is used to measure overall trade performance of a country.
It measures revenue from exports and expenditure on imports.
What is the Balance of Payment?
The balance of payment is an accounting record of all foreign transactions by public and private entities during a specified period of time.
What is Market Equilibrium in International Trade?
Market Equilibrium occurs when quantity demanded of a good offered by a sellers at a given price equals the quantity buyers are willing and able to purchase at the same price.
What is a Producer Surplus?
Producer Surplus is a measure of producer welfare.
The difference between what producers are willing and able to supply a good for and the price they actually receive
What is a Consumer Surplus?
Consumer Surplus is measure of consumer welfare.
It is measured as the difference between what consumers are willing to pay for a good (or service) and what they actually pay.
What is the difference in Exchange Rate & Barriers and Trade?
- Each country has its own currency but transactions between countries require a conversion from the seller’s to buyer’s currency.
- Few barriers to trade within a country
What is meant by the Exchange Rate?
• Exchange Rate is the price of foreign currency in terms of the domestic currency. The rate at which this conversion takes place is called the exchange rate. e.g.
– 1AUD = 0.78 USD OR 1USD = 1.28AUD
– 1AUD = 0.52 GBP OR 1GBP = 1.92 AUD
What is the Dollar Appreciation/ Depreciation and Trade?
When AUD depreciates relative to other currencies, ceteris peribus, it will lead to higher more exports & less imports.Its appreciation has the opposite effect.
What impacts do changes in the exchange rate have ?
- Changes in exchange rate have important impact on trade due to price linkage.
- Impact of changes in exchange rate to trade depend on whether the supplier is ‘price taker’ or ‘price maker’ (elasticity of demand or slope concept)
What is a Price Maker?
Price maker: If its a differentiated product (e.g. a recognized brand), the buyer has no choice but to pay the price increase arising from the dollar appreciation.
