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Opening Case: Sugar Subsidies Drive Candy Makers Abroad
QUESTION 1: Reflect on the U.S. policy on sugar. As a producer, how do you feel
about the policy? Does your opinion change if you are a candy manufacturer? What is
your perspective as a consumer of candy and other products containing sugar? As a
displaced worker in Ohio, how do you feel about the policy? Should a government
protect a few at the expense of many? Is the policy fair?
Based on the description of the textbook, U.S the government has stepped into sugar
industry to support them with the deficit or excess amount of sugar. The intention of
the action is to stabilize the sugar industry. In the result, if the sugar products are
deficit, the government will support the producer by importing with a low tax rate.
And if it experiences a surplus in the market, the government will protect the sugar
price by selling a lower price to the ethanol producers. As mention in the textbook,
the government has spent hundred of million of dollars to support the sugar industry.
If I’m a producer, I should be thankful for this policy because the production of sugar
might be up and down, so having the government as a back door supporter is more
secure of the producers. As a consumer of candy I would like the product to be made
in the U.S. to support the local producer and manufacture. I would properly
understand why the sugar price in the U.S is too high causing the sugar manufacture
in Ohio export some of the sugar production out of the U.S. because everyone wants
to seek for low cost production with maximum profit. However, the government
should implement some new policy that could protect the labor industry in the U.S.
because if most of the manufacture outsource jobs to foreign countries, it would
cause a high unemployment. The policy seems fair.
QUESTION 2: Why do you think the policy on sugar in the United States is so
heavily slanted towards sugar producers at the expense of candy manufacturers and
consumers? What can manufacturers do? What does your response tell you about the
benefits of free trade?
Sugar producers are under too many pressure of how to produce sugar products
successfully but also how to maintain a stable market. They rely on U.S. policy to
support the sugar market pricing. They are the one that most be affected because as
the middleman, their production and success are based on the consumers and also
U.S. government protection. They are group that will be severely affected my any
changes or influences from both sides. The producers are at lost when fewer
consumers are demand for the sugar products, and also the ability to supply at a low
cost to the manufacture because of the U.S. government policy. The manufactures can
try to lobbying the government for better pricing system that in a long run would
help the manufacture productions, U.S. consumers and employees. It has been proven
by several theories such as Adam Smith, David Ricardo, and Herkscher-Ohlin theory

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that free trade will stimulate economic growth as a whole even it is associated with
some costs such as job reduction.
Closing Case: China Limits Exports of Rare Earth Materials
QUESTION 1: Which groups benefitted the most from China imposing an export
quota on rare earth metals? Did it give the Chinese domestic manufacturers a
significant cost advantage? Did it result in dramatically increased quality and
environmental standards?
China producers and manufacturers seem to be greatly benefit from the China
strategy. By limiting the production of rare earth material in mining industry could
be a competitive strategies that are driving rare earth pricing to go up. When the
sources are limited, the production will be less, and high demand would cause the
rare earth material price to go up. In the result, the China supplier and manufacturers
can set high price, control the supply, and the production. Higher profit will be
greatly stimulates China economy grow faster. I think this imposing the export quota
strategy give the Chinese domestic manufacturers are significant cost advantage
because they are able to demand for higher prices due to the limitation of supplies. It
seems that it did not increase any quality or environmental standards.
QUESTION 2: Given that 97 percent of rare earth metal production is now done in
China, an increase from 27 percent to 97 percent between 1990 and 2010, do you
think countries such as Australia, Canada, and the United States should reconsider
their environmental restrictions of the production of such metals?
Even thought there is a significant growth in rare earth metal production in China
from about 30 percent to almost 100 percent, Australia, Canada, and United States
should not set low regulation regarding the environment restrictions of the
production of that rare earth material. However, they could take China significant
growth into consideration by encourage, support, or invest in local production. That
means these countries should help the mining companies by supporting them with
capital, support, and protect their intellectual work to stimulate local labor
production as well. In addition, another reason is that rare earth material is greatly
benefit to our industry bust they also might have a significant impact to our people
and society. We better run slow and be safe, then try to run fast and fall down getting
and learning from our mistakes.
DQ7
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Opening Case: Sugar Subsidies Drive Candy Makers Abroad QUESTION 1: Reflect on the U.S. policy on sugar. As a producer, how do you feel about the policy? Does your opinion change if you are a candy manufacturer? What is your perspective as a consumer of candy and other products containing sugar? As a displaced worker in Ohio, how do you feel about the policy? Should a government protect a few at the expense of many? Is the policy fair? Based on the description of the textbook, U.S the government has stepped into sugar industry to support them with the deficit or excess amount of sugar. The intention of the action is to stabilize the sugar industry. In the result, if the sugar products are deficit, the government will support the producer by importing with a low tax rate. And if it experiences a surplus in the market, the government will protect the sugar price by selling a lower price to ...
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