The Pros And Cons Of Long Distance Trade

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1. Introduction The amount of wants that human beings possess is infinite, however, the amount of resources the earth offers is finite. Therefore, it is impossible for a single person to satisfy all their needs. This is the economic problem. In order to maximise their potential satisfaction, humans need to make choices. One of these choices is to engage in trade. By doing so, a person can gain something that he could not have gotten on its own, out of a transaction with another economic agent. Thanks to trade, both parties receive personal gain. The oldest form of trade is bartering; the exchange of goods with other goods. The first proofs of long distance trade date as far back as circa 15.000 years (Watson, 2005). People can conduct trade with each other within the same country and countries can trade with other countries. However, international trade is subject to more regulations than national trade. This is due to the fact that governments have the ability to impose rules…show more content…
216) , meaning that, for example, in the case of a business, the quantity a company is able to supply to other countries is only limited by the company’s own production capability, it is not influenced by external encouraging factors such as subsidies or hindering factors such as tariffs. The only restriction that the supplier needs to account for is the cost of transporting its goods or services to the new distant market created by the absence of trade barriers. However, this restriction became minimal with current technology allowing for cheap and reliable trans-continental transport. Some examples are “the opening of the Suez Canal, the expansion of the railway system to the grain fields of North America, the Russian plain and the farmlands of northern India, and the development of steam powered ships like the Manila” (The CORE Project, 2015, p. Section

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