06 Quiz 1 in IBT

a. How should your firm respond? What does this tell you about the use of
targeted trade barriers?

If the manufacturing specifications have not altered considerably, it

would seem natural to look at Malaysia or Hong Kong for manufacture once
more. When the U.S. government imposes a specific ad valorem duty on
Thai computer imports, it forces producers to seek alternate techniques, such
as looking in other countries, to get past these restrictions. Depending on the
legislation, a different strategy would be to create the computers in pieces
and then assemble them in the United States. Alternately, keep making them
in Thailand and put them together in Malaysia or Hong Kong. Such
narrowly focused trade barriers are frequently simple to get around. Targeted
trade restrictions are typically ineffectual, much like most government
interventions. Production should be flexible for the company. The business
should take a forward-thinking stance and investigate which country is ideal
for producing its goods and services.

b. During a pandemic, whose interests should be a paramount concern of

government trade policy: the interests of producers (businesses and their
employees) or those of consumers? Explain.

The interests of producers (businesses and their employees) should be

the paramount concern of government trade policy. The long run interests of
consumers should be the primary concern of governments, based on a
utilitarian approach (the best).

During a pandemic, whose

b.

interests should be a
paramount
concern of government
trade policy: the interests
of producers
(businesses and their
employees) or those of
consumers? Explain.