To what extent should Cuba specialise in cigaret production?
To what extent should Cuba specialize in cigar production?
The tobacco plant ( main ingredient used in cigar production), which originally originated from South
America, arrived to Cuba some where between 3000 and 2000 BC. It was considered by the aborigines to be a “miraculous medicine” and a essential element in their religious, political and social ceremonies. ! This lead to cigars becoming an important part of lifestyle.
In Cuba, agriculture has played an important part of the economy for hundreds of years. Currently, agriculture contributes less then 10 percent to the GDP ( gross domestic product), but employs roughly one fifth of the working population. 30% of the countryʼs land is used for crop cultivation. Cuba has the second largest area planted with tobacco in the world. Cigars are a famous product worldwide and almost all of
Cubaʼs production is imported. Cigars are the third largest source of hard currency, a widely accepted form of payment, for Cuba. The income derived from the cigars is estimated at 200 million US. Cigars are one of the countryʼs most exported products; 77 million exported in 1991, 67 million in 1992 and 57 million in 1993.
In 2003, 2.1 million cigars were exported to North America.
As all countries have to cope with scarcity of resources, a higher or lower production rate of cigars will result in raised or lowered opportunity cost in other products. There will be unlimited wants for items, so the resources used to make cigars instead of other products will have to be considered. The type of market may also be considered (Cuba currently has a planned market) , should it be a free, planned or mixed economy, as this will widely effect the production, distribution and actual product itself. Another factor that should be questioned is employment issues. This would also create an opportunity cost in workers, as people that would or not be working in non-cigar related businesses would be the cost. Another issue, which is
The tobacco plant ( main ingredient used in cigar production), which originally originated from South
America, arrived to Cuba some where between 3000 and 2000 BC. It was considered by the aborigines to be a “miraculous medicine” and a essential element in their religious, political and social ceremonies. ! This lead to cigars becoming an important part of lifestyle.
In Cuba, agriculture has played an important part of the economy for hundreds of years. Currently, agriculture contributes less then 10 percent to the GDP ( gross domestic product), but employs roughly one fifth of the working population. 30% of the countryʼs land is used for crop cultivation. Cuba has the second largest area planted with tobacco in the world. Cigars are a famous product worldwide and almost all of
Cubaʼs production is imported. Cigars are the third largest source of hard currency, a widely accepted form of payment, for Cuba. The income derived from the cigars is estimated at 200 million US. Cigars are one of the countryʼs most exported products; 77 million exported in 1991, 67 million in 1992 and 57 million in 1993.
In 2003, 2.1 million cigars were exported to North America.
As all countries have to cope with scarcity of resources, a higher or lower production rate of cigars will result in raised or lowered opportunity cost in other products. There will be unlimited wants for items, so the resources used to make cigars instead of other products will have to be considered. The type of market may also be considered (Cuba currently has a planned market) , should it be a free, planned or mixed economy, as this will widely effect the production, distribution and actual product itself. Another factor that should be questioned is employment issues. This would also create an opportunity cost in workers, as people that would or not be working in non-cigar related businesses would be the cost. Another issue, which is