Why Is Important to Know Which Country Has an Absolute Advantage Vs. a Comparative Advantage?

1) Why is important to know which country has an ABSOLUTE advantage vs. a COMPARATIVE ADVANTAGE?

Because some country can produce goods and other country can’t. It is important to know which country has Absolute advantage vs comparative advantage because they can trade goods.

2) Does your HOME country have an absolute/comparative advantage in any industry/product/service? What is it?

Guyana has a comparative advantage because they can produce goods, which are mostly fruits. Due to the warm weather and good soil they have an they are good for fresh fruit.

Click the link below to find more information to help answer these questions.

http://www.shmoop.com/international-trade/absolute-comparative-advantage.html

3) Where did Howard Schultz, CEO of Starbucks, get his idea to open up coffee shops?

He got his ideal from an Italian café.

4) Measuring GlobalTrade:

What is the U.S. Balance of Trade? Where did you find this data?

USD 45.68 billion.

http://www.tradingeconomics.com/united-states/balance-of-trade

Does the U.S.have a trade surplus or a trade deficit? Is this good or bad for the U.S.economy? Why or why not?

The US has a trade deflect. No a trade deflect is not bad or good for the US economy its when the country borrow goods from another country to make a profit from without trading back.

5) What is dumping? Why is dumping unfair?

Selling products in a foreign country at lower prices than those charged in the producing country. Dumping is unfair because the country is selling the goods for more in their country for what they are trading it for.

Strategies forReaching Global Markets

6) What is licensing? Other than what is mentioned in the text, find ONE company that has licensed its product or service to another. What company? What product?

The right to manufacture its product or use its trademark to a foreign company for free. Disney license their product globally. They license their television shows like Mickey Mouse clubhouse or even toys belonging to the Disney category.  

7) Who is the LARGEST exporter of goods and services in the world? What is that number? Where did you find this data?

China

$1.58 trillion

http://articles.latimes.com/2011/apr/08/business/la-fi-toptraders-20110407

8) Who is the LARGEST importer of goods and services in the world? What is that number? Where did you find this data?

United States

$1.97 trillion

http://articles.latimes.com/2011/apr/08/business/la-fi-toptraders-20110407

9) What is a multinational corporation? Why are the companies in the box on Page 72 considered multinationals?

An entity headquartered in one country that does business in one or more foreign countries. They do business in more than one country other than their home country.

Forces AffectingTrading in Global Markets

10) What are four major hurdles to successful global trade?

1. Sociocultural forces
2. Economic and financial forces
3. Legal and regulatory forces
4. Physical and environmental forces