International Economics Essay Example | Topics and Well Written Essays - 1250 words

International Economics - Essay ExampleSocial and cultural characteristics also impact the toil techniques since the tune of trust among Indians facilitates the maintenance of soci solelyy held knowledge that, in turn, allows the social organization of the economic activity of carpet making. In India, values, ideas, human relationships and knowledge of carpet making are transmitted from one generation to another as part of the robust Indian culture. Conversely, the carpet production process in the US is characterized by mechanization of most processes. 2This allows for large-scale production as a single carpet producer uses colossal amounts of fiber each day. Resource endowment, in the US, includes massive amounts of financial and intellectual capital, towering entrepreneurship and robust technologies. Additionally, income levels are relatively large, enabling entrepreneurship and the establishment of huge companies that churn out massive quantities of carpets throughout the year . Essentially, resource endowment, in the US, including land, capital, labor and entrepreneurship, is quite prosperous. Social and cultural characteristics of the US that impact carpet production include an appreciation for formal training and education, which gists in highly ball-hawking and specialized human capital essential for the production process. Question 2 carpeting production is one of Indias oldest industries, dating back to the Mughal Dynasty. However, carpet production centers on the individualistic skills and knowledge of a weaver rather than collective appreciation of carpet making acquired through formal education and training. Due to imperativeness to furnishing product, several carpet manufacturing centers have developed across the farming. Carpets produced in India are mostly exported since the Indian market for carpets is quite small as a result of the low purchasing capacity of local players. Presently, Indias carpet export is worth Rs.2600 crores while th e local market size is approximately Rs.200 crores. 3The industry has high growth potential as exports increased by 42.23% between 2004 and 2007. 4However, the industry is marred by challenges such as poor market channels, resulting in ignorance indoors the Indian market. 5On the other hand, the carpet industry in the US is highly developed. The industry shipped 1.969 billion square yards of carpet, in 2003 this was worth approximately $12 billion. Carpet shipments increased to 2.3 billion yards in 2004, demonstrating the massive potential inherent in the US carpet production industry. Presently, the US meets at least 45% of the terra firmas carpet needs. 6The US carpet industry is characterized by innovations and technological advances that allow for large-scale production of highly-priced goods. Technological progress is one of the primary reasons arse massive growth in the US carpet industry. The US carpet industry is highly organized, allowing for sufficient knowledge in the domestic market. 7 As a consequence, the US effectively meets at least 90% of its domestic carpet needs. Question 3 Latent demand for carpets in the USA pushes the country to become a primary importer of carpet despite being an efficient carpet producer. This is because carpet production, in the US, has been unable to offer complete satisfaction to all domestic needs and wants, resulting in a gap between what is available and desirable. The local US market has a high desirability for hand woven, Indian carpets, which are considered stylish and sophisticated. Conversely,