1. Do you think the benefits of counterfeit products exceed the costs, or vice-versa? Defend your answer.Counterfeit goods are a problem in many product lines, including perfume, luggage, handbags, pharmaceuticals, designer clothing, shoes, cigarettes, watches, sports memorabilia, and fine wines, to name just a few. One counterfeit group in New York imported watch components that cost it about 27 cents each and then sold them to wholesalers for $12 to $20. The wholesalers then sold them to street vendors for $20 to $30, and the street vendors sold them as Cartier watches for as much as

$250. That was still well below the price of a real Cartier watch (about $1800). Wine makers are also concerned about the counterfeiting of their products because some of the top names in wine (e.g., Chateau Mouton Rothschild and Penfolds Grange)

cost as much as $3000 a bottle, and this is an incentive to counterfeiters to make a lot of easy money.

Wineries are fighting counterfeiting by embedding microchips in the label that can be read with an optical scanner, and by laser-etching the wine's name and vintage year into the bottle