TRUE OR FALSE: If your answer is FALSE, explain the reason.

1.) The growth trends in the United States of America and Europe today illustrate the impact that international business has on blue-collar and white-collar workers in wealthy countries as relatively low-skill factory jobs as well as high-skill service profession jobs migrate overseas.

2.) One way international trade benefits consumers is by providing lower living standards.

3.) It is estimated that for every billion dollars worth of exports from the United States, 100,000 domestic jobs are created.

4.) Domestic investment in a country brings funds and business culture from abroad, creates new well-paying jobs, introduces innovative technologies, and enhances the skills of domestic workers.

Scenario - Power Trip Unlimited, LLC

Is it hurricane season? Is there a tsunami warning? Did an earthquake take place somewhere in the world? While these are not pleasant questions to ask, the Miami, Florida-based business Power Trip Unlimited needs to be ready to quickly respond to such events. This unique company offers a vast line of emergency generators and supplies to help individuals caught in the devastation these types of natural occurrences can create. Staffed by experts in the generator field, Power Tripp Unlimited has assisted numerous people begin the recovery process in the aftermath of a calamity. In the past year alone, sales for this company have surpassed every goal that was set. This financial boom occurred while the company conducted sales only in the U.S. market.

Power Trip's management team now realizes that foreign markets such as India and China offer incredible opportunities for the company. Both foreign nations desire to engage in trade with the company in exchange for allowing its products to be introduced within their borders. India and China have agreed to supply Power Trip with several necessary components for its generators in exchange for allowing the company free operations inside their national boundaries. Power Trip realizes there are numerous challenges facing the company in the foreign market arena. But guided by the belief in the expertise of its staff and the quality of its products, it is ready to face any challenges foreign markets put in front of them. This company stands eagerly poised awaiting its first international sale.

5.) The agreement between Power Trip Unlimited, China, and India to engage in foreign trade will ultimately provide greater opportunities for consumers of Power Trip's products. Which one of the following is least likely to be considered a benefit of this trade agreement and explain?

a. Consumer choices may be limited by government restrictions on the operational capacity of the various products.

b. There will be a greater amount of choice for consumers.

c. Consumers may be offered a lower price on the goods.

d. Consumers will be afforded a higher living standard.

e. Consumers may have greater access to the product during emergency situations

6.) Which one of the following would be the least restrictive way in which India and China could impede sales of Power Trip's products within their borders despite the agreement to allow free operations of the company within their nations' boundaries? Explain your answer.

a. Place a tariff on the products

b. Establish an ad valorem tariff for the products

c. Establish a generalized system of preferences (GSP)

d. Establish a very high specific tariff

e. Establish stringent custom duties

7.) The agreement reached between Power Trip and the two foreign nations where they would sell components to Power Trip in exchange for allowing sales of its products within their borders most closely resembles which one of the following? Give a brief statement to support your answer.

a. Subsidizing exports

b. Establishing a generalized system of preferences

c. Development of a domestic content provision

d. Establishment of a quantitative restriction (QR)

e. Engagement in countertrade

Scenario - The Audrey Firm

The Audrey Firm is an international trade consulting firm currently providing its services in eight foreign nations. The primary goal of this company is to prevent trade missteps from taking place between foreign nations conducting business with each other. The participating nations prefer to seek counsel with this firm before any of their actions result in major international involvement or World Trade Organization intervention.

In the past, the Audrey Firm's team of experts has handled international situations having the potential to create serious unrest between neighboring countries. Their guidance and expertise have been successful in keeping trade operating freely in several areas of the globe. The Audrey Firm is receiving an award for their exemplary service later this year in Washington D.C.

8.) As one of the Audrey Firm's more prestigious clients, OPEC, which exemplifies an export cartel, requires constant overseeing to ensure it complies with the agreement arranged for export cartels. Which one of the following items is least likely to appear on this type of agreement, and explain it in brief statement?

a. Substitutes for the goods being offered must not be available

b. Demand for the product in question must be elastic

c. There needs to be a strong demand for the product in question at basically any price

d. There must be no cheating on the stated agreement by the agreeing members

e. Inelasticity in the demand for the product being offered must exist

Scenario - The Audrey Firm

The Audrey Firm is an international trade consulting firm currently providing its services in eight foreign nations. The primary goal of this company is to prevent trade missteps from taking place between foreign nations conducting business with each other. The participating nations prefer to seek counsel with this firm before any of their actions result in major international involvement or World Trade Organization intervention.

In the past, the Audrey Firm's team of experts has handled international situations having the potential to create serious unrest between neighboring countries. Their guidance and expertise have been successful in keeping trade operating freely in several areas of the globe. The Audrey Firm is receiving an award for their exemplary service later this year in Washington D.C.

9.) Many of the clients engaging the services of the Audrey Firm practice managed trade. All of the following would most likely be a practice these nations engage in when conducting trade with other nations except which one? Explain briefly.

a. Offer protection for specific companies

b. Adhere to stringent guidelines concerning the use of child labor

c. Pay close attention to the safety of products produced

d. Embargoes are employed to punish nations engaging in offensive practices

e. Strategic industries are given free rein in their trade practices

10.) The clients of the Audrey Firm use various techniques to restrict imports to their countries. Which one of the following assigns a fixed amount of tax for every physical unit imported? Explain your answer.

a. Import quota

b. Voluntary export restraint

c. Ad valorem tariff

d. Specific tariff

e. Domestic content provision