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1. Some of the advantages Blades could gain from importing from and/ or exporting to a foreign country such as Thailand are comparative advantage theory and the imperfect markets theory. Since business is dwindling down in the United States for Blades, Blades does not have comparative advantage in the United States anymore. If Blades were to export Blades to Thailand it would gain a comparative advantage because roller blades are not as penetrated in Thailand as they have in the Unites States. Blades could even gain a bigger profit if they were to export roller blades to Thailand because people who are looking for luxurious items would be willing to pay top dollar for roller skates. The imperfect markets theory has to do with conditions where factors of production are somewhat immobile. In the United States production of roller blades has started to become immobile. If Blades where to maximize on Thailand’s resources to reduce their spending on building roller blades the company would be saving itself more capital, therefore increasing it’s profit. 2. Some of the disadvantages Blades could face as a result of foreign trade are for one the company is in its infancy and it is a relatively small company. Since the company is in it’s infancy it might not be safe for it to start foreign trade for at least another two years, in this time the company would become more established and well known and have more capital. If it were to venture into foreign trade to Thailand, Blades could be exposed to international economic conditions and this could affect Blades cash flows in the long run. If conditions in Thailand weaken the consumers suffer a decrease in their income and their demand for Blades decreases. As this happens Blades cash flows would decrease. In the short run, Blades could also be affected by international political risks, such as tax increases in the foreign

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