Runze Tian
Econ 201
Dean Bruce
10 December 2015
International Trade Simulation Assignment
First, the two Islands in the game are Green Island and Yellow Island. By all means, Green
Island has more labors and Yellow Island have more capital. So I choose Green Island,
because I’m from China and Green Island is sort of like China’s situation. And I choose
Yellow Island for my trading partner, because I study in U.S. and Yellow Island is kind of
like situation of U.S. As we know, Yellow Island’s technology and machinery are better
than Green Island and Yellow Island have more labors which means there cost on labor
will be way less than Green Island. And then I start to trade with my 10 jeans in total of 41
jeans to Yellow Island’s 5 cell phones in total of 21 cell phones. After the trade, my jeans
production increases and cell phone production decreases, then I trade my 10 jeans in total
of 47 jeans with Yellow Island’s 7 cell phone in total of 27 cell phones. As we can see, the
production of cell phone on Yellow Island increases as well so that we made a benefit from
that trading for both of us. And we all increase our economics welfare. Because I have
cheap labor and making jeans need huge amount of labors; therefore, the opportunity cost
of producing jeans on Green island is lower than Yellow Island. On the other hand, Yellow
island have huge advantage on capital and producing cell phone need big amount of
capital; therefore, Yellow island have lower opportunity cost on producing cell phones. By
trading with each other, we can focus on producing what we professions on which benefits
the both of us.