Marketing Chapter 3&4 Questions

Marketing Chapter 3&4 Questions

2. Explain what world trade means. What is the role of WTO and economic communities in encouraging free trade? What is protectionism? Explain import quotas, embargoes, and tariffs? World trade is the flow of goods and services among different countries. It is the value of imports and exports of the world’s nations. The World Trade Organization (WTO) is a global international organization that deals with the rules of trade between nations.   WTO agreements are negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The role of the WTF is to help producers of goods and services, exporters, and importers conduct their everyday business. An important role of the WTO is that it tackles protection of copyright and patent rights which assists in preventing piracy. Protectionism is a policy adapted by the government that enforces rules of foreign firms to give domestic companies an advantage. Import quotas are limitations set by the government on the quantities of products that are allowed to enter or leave a country. This reduces competition for their domestic competitors. Embargoes are a quota that completely prohibits specified goods from entering or leaving a country. Tariffs are taxes given on imported goods to give domestic competitors an advantage in the marketplace. This makes foreign goods more expensive than their own domestic products.
5. What are a monopoly, an oligopoly, monopolistic competition, and pure competition? A monopoly in a market is when one firm is the only supplier of a product and is able to control the price, quality, and supply of that product. An oligopoly is a market structure in which a small number of sellers hold a substantial share of the market and compete in a market with many buyers. Monopolistic competition is a market structure when many firms have slightly different products which offer unique consumer benefits. Pure competition exists when many small sellers of which offer similar...