The following two websites provide information on the United States’ top ten exports and top ten imports:

http://www.worldstopexports.com/united-states-top-10-exports/

http://www.worldstopexports.com/united-states-top-10-imports/

Examine each website carefully and compare and contrast the exports and imports to deduce conclusions on the United States’ areas of comparative advantage and disadvantage.

Which generalized products are our country’s principal exports?

Which generalize products are our country’s principal imports?

What is the latest trade surplus/trade deficit numbers?

In the United States, price floors are commonly used to support farmers, such as for dairy products. Assume several U.S. trading partners impose tariffs on dairy products exported from the United States. The tariffs are effective and are reducing dairy exports from the United States and have pushed the domestic equilibrium price of milk below the price floor. Using a supply and demand model, illustrate what happens to the U.S. domestic price of milk, quantity of milk sold in the United States, and any surplus or shortage of milk. Be sure to support your graph with a written explanation.

1. A major topic in the foreign policy area today is how far the United States should intervene in humanitarian crises in other countries. Some people say the United States has a moral responsibility to intervene if there is a humanitarian crisis in another country or an issue like an oppressive dictator taking advantage of the people. Some people say the United States should worry about its own people, that we have people in our country who are suffering, and we should not intervene in a crisis in another country unless it directly impacts the United States in some way. Presidents and members of the United States Congress will give their opinions on this when they are running for election. What are your thoughts and fully explain your answer. at least 5-6 sentences

2.  A multinational company has three subsidiaries located in the United States, Switzerland, and Great Britain. The company recently set up a multilateral netting center to help manage its foreign exchange exposure. Listed below are the average monthly invoices sent from each country to each of the other subsidiaries with which it does business. Calculate the net flows that will occur as a result of the new netting system. The company uses the U.S. dollar as the common referencing currency.

Existing Exchange Rates:

Swiss franc (SF) = $0.13

Pound sterling (PS) = $1.45

United States to Switzerland $100

United States to Great Britain $250

Switzerland to United States SF300

Switzerland to Great Britain SF150

Great Britain to Switzerland PS200

Great Britain to United States PS100

Consider what you know about global tax strategies and capital budgeting (NPV) analysis. The current U.S. marginal corporate tax rate is 35%. This has provided an incentive to U.S.-based firms to create profit (therefore jobs) outside the United States (in low tax regimes) and leave it outside the United States.

Many in Congress are currently advocating a one-time, repatriation tax of 5% in order to create jobs. (i.e. any profits held outside the United States may be returned to United States and taxed at only 5%, rather than 35%. This would be a one-time event, the underlying tax law and rates would not be changed). Would the repatriation tax be likely – or unlikely – to have the desired effect of creating jobs in United States. Why or why not?

An American worker can produce either 5 cars or 8 tons of grain a year. A Japanese worker can produce either 4 cars or 9 tons of grain a year. To keep things simple, assume that each country has 100 million workers.

Complete the following table with the number of workers needed to make one car or 1 ton of grain in the United States and Japan.

Complete the following table by determining the opportunity cost of a car and of a ton of grain for both the United States and Japan.

Given this information, (neither country/United States/Japan) has an absolute advantage in producing cars, and (neither country/United States/Japan) has an absolute advantage in producing grain.

Also, (neither country/United States/Japan) has a comparative advantage in producing cars, and (neither country/United States/Japan) has a comparative advantage in producing grain.

Assume that without trade, half of each country's workers produce cars and half produce grain.

Complete the following table with the quantities of cars produced and consumed in each country if there is no trade.

True or False: Both countries would be better off if they produced the good in which they have a comparative advantage and then traded 200 million tons of grain for 100 million cars.

True

False