Chapter 1:
Q: You are a U.S. citizen recently assigned as the manager of distribution in a European country where bribery is relatively acceptable. Your job description includes responsibility for accepting shipments as they enter the local port authority. On your first trip down to the docks to sign for a shipment, the customs agent in charge asks for a “tip” to clear the goods for pickup. The value of the incoming shipment is around $150,000. Knowing that the government has recently launched an initiative to reduce corruption, how do you react? If additional information would be helpful to you, what would it be? Min 700 words (this includes the question)A: To my point of view as a manager this would be a very difficult situation. To begin I would be in a complete different country, which means and I know the customs, rules, and laws are not the same. First I would need additional information such as, what would the governments initiative consist of. For example if the government’s initiative consist of making bribery illegal. Also if people could report a bribery, to the police and it would be considered a crime. Or even if people would be willing to work undercover to see which of the major companies are participating in bribery or supporting it. In my opinion this would be since I would work for a company that receives goods through the port. Also I would need to know more of my company. For example what if this bribery or “tip” occurs only for companies that are surrounded the port. In other words if the governments initiative would be for big companies like the one I am working for. What am trying to get with this, is that we don’t know what type of goods are being received or sent and if it is all in the legal margin. What if what is being transported is illegal and that is why there’s a need for a tip that enhances bribery. What if the company I work for is alredy under suspicion for importing either drugs, or involved with human trafficking. I would like to know what percentage of crime involving those circumstances the country has also. In the end no matter the situation, it would be a tough decision to make. This is because you don’t know if because youdont give that tip the company doesn’t get its goods. Also you could get fired if you go to maybe a supervisor or someone in a higher position and they support bribery. It could go wrong because what if you oppose to the idea or you wouldn’t be facilitating the process for the company. In the end for me it would be a difficult decision even though it may seem like nothing. This is because either I could give the tip and keep going, but then again I wouldn’t know if something illegal is happening. On the other hand I could say no and report it but I would risk losing my job. To get to my decision I would deny giving a tip to the other worker. My reasons, and explanations would consist of explaining that I come from a country that has a low percentage of bribery. Also that he or she as a worker is doing their job to check and clear the goods and just like I am, they are also earning a paycheck, and why go through the wrong path. Lastly that I wouldn’t be comfortable since its not within my ethic to give a “tip”.

1. Define Globalization. How does denationalization differ from internationalization?
Globalization as referred to as “the name we give to this trend toward greater economic, cultural, political, and technological interdependence among national institutions and economies.” (J. Wild, K. Wild 7). To my understanding globalization consist of nations being more dependent on each other. This makes economies more intertwined and become interdependent. Interdependence consists of depending on each other in order to get goods. This means and increase in the facilitation to get goods from one nation to another, or economy. Globalization doesn’t just consist of goods but also of services, money, people, and ideas. The more freer the flow the higher interdependence and the high the globalization level. Next there are multiple differences between denationalization and internationalization. To my understanding denationalization means making a company or product private. That means that boundaries among nations have become less important or relevant. This means closing down on a product making it more local rather than making it accessible for others in the whole world. Compared to Internationalization, it is making a product or designing a product in a way that can have easy access to. In other words designing the product in a way that can meet the needs of people in a different country. Also creating it in a certain way that it can be easily be adapted to. This in comparison to denationalization also consists of cooperation. this cooperation can be between countries crossing boundaries. Also for corporation to be able to operate in other countries. Now, denationalization consists of making companies in to private corporations. This would reduce the ability to go across nations to work together, or operate in different countries. In the end Denationalization is going private and reducing the relationships across the globe. In comparison Internationalization is being open to corporations to operate in different countries. Also designing a product adaptable and able to meet needs in different countries. This making a better cooperation across national boundaries.

2. List each benefit a company might obtain from the globalization of markets.
First globalization of markets “refers to the convergence in buyer preferences in markets around the world” (J. Wild, K. Wild 7). This trend of globalization of markets aids international business due to the assets it offers companies. This assets or benefits consist of five benefits in total. The first one is the reduction of marketing costs. This benefit consist of the element of standardizing. This means creating a similar product for the global market and just redesigning the packaging and instructions to meet the needs of other markets across the globe. Another example is using a the same advertising commercial and just dubbing the language. This will help the company reduce costs as well. The whole reduction of cost consist of standardizing different marketing enterprises. The second marketing opportunity is that it creates new marketing opportunities. This benefit consists of exploring markets across the globe that can be successful if their home market is small or becomes saturated. For example the customer service representatives when you want to order from a catalogue. Instead of a god this is a service,but if you find that population is high in another country then that’s a good way to promote a product and have people ready to take orders, even if its from your home country but you are creating business in another country. This will be if another country needed employment opportunities.It would be like building a call center in India for example. The next benefit is that it levels uneven income streams. This in other words is getting profit for the same seasonal product, with international sales in order to level its income stream. For example retail clothing stores, like Banana Republic. This store has seasonal changes in fashion. With its multiple stores across the globe like Quebec and Turkey it can level its income by the summer fashion used in one part of the hemispheres can be used in another part of the world when its summer. It would be like instead of those clothing going out of “fashion” or season it could be promoted elsewhere instead of going straight to the promoted sales. The fourth benefit is local buyers’ needs. This entails the constant monitoring of peoples wants and needs in order to satisfy them. Example McDonalds in India, due to cows being sacred they have created the “ Maharaja Mac”. Basically this is always looking out for what customers want in order to be satisfy. Lastly is global sustainability. This consists of a company to operate and to continue operating in an environmentally friendly way for today’s generations and future generations. One good example is companies going by the motto “ reduce, reuse, and recycle.” In the end if you are not a company that worries about the environment its customers live in then you will be call out, and have a reduction of consumers.

3. How might a company benefit from the globalization of production?
There are three ways a company can benefit from globalization of production. These ways are acces to lower cost workers, access to technical expertise, and access to production inputs. Now, globalization of production “refers to the dispersal of production activities to locations that help a company achieve its cost minimization or quality maximization objectives for a good or service.” (J. Wild, K. Wild 8). First a company benefits from the access to lower cost workers by paying employees less in another country to produce the same amount of merchandise that local employees would produce at a higher pay rate. One example of this would be Walmart and employees in china. Making the same product for less cost to them and that way fulfilling the low prices it offers customers. Next is the access to technical expertise. This access is producing or the creating of a product service with the know how of another country. Example the series “the Simpsons”. They get their step by step frame directions from South Korea. So basically is specialization of each country and just doing it globally. Lastly is the access to production inputs, this benefits companies to access the needed resources that are either too costly closer to the home country or not available. This helps companies reach resources that they need in order to produce a service or a good that is in high demand. Tis creates that relationship with other countries, creating them that pathway to international markets. One good example would be Japanese paper company. Since it’s a small densely populated island it has less resources thwmb any other country. Even with this Japan has a big paper company, Nippon Seishi, which owns processing facilities in Australia,Canada, and the United States.this ensures them a steady b flow of its key intruding which is less subject to fluctuating prices. Also they are considering access to cheaper energy either from China or Vietnam or even both, since their costs are lower than Japan.
Chapter 2:
Q: You are the public relations director for a company that recently announced its decision to close is factory in the United States and to outsource the work to manufacturers in Asia and Layton America. Your firm is doing just what many other companies have already done, reducing labor costs by shifting work to low wage countries such as China, India, Mexico and Central America nations. Yet the media and disgruntled workers are lambasting your firm’s decision. Is there a reasonable response to charges that the companies you will hire frequently exploit child labor, force women to work 75-hour weeks, and destroy family units? In my opinion, as a public relations director for this company the situation would be a bit tricky. It is possible to do it, to overcome those types of charges because today many companies outsource and to countries who frequently establish those practices. To be honest there is no such thing as a reasonable response when it comes to responding to the media or disgruntled workers. This is due to the fact that no matter the response that the public relations director provides it will be either be take the wrong way or changed in order for the media to keep doing its job and getting more people on their side. Either way one has to know that there will always be something in the opposing side. As the director we would have to reason with them in a way that is not compromising the company. For example starting that it will benefit all of the company’s customers because we would provide low costs to our merchandise. To back that up we would have statistics or an initiative. This initiative would consist of what the company is doing to regulate or to decrease the long hours for women, the child labor, and the destroying of family units. With this we could show change, which means that the company is doing something about it and that it also stands on the same side of the community that disagrees. As a company it would be explained that it’s a slow process but there will be a decrease and that the company would like to set an example for others in order to create a higher impact. In my opinion this would be a good way to go for the company.

1. Define culture. How does ethnocentricity distorts one’s view of other cultures?
My definition of culture consists of ones customs, religion, and the upbringing of ones self in a family. It is also a set of values that your family gives you or the beliefs that you are born in to. So in the end culture is a set of beliefs, values, and customs of a specific group of people. In other words there are as we know, different cultures exist all over the world. For example Asia and its different regions with different religions and different beliefs. This means that only un the continent of Asia there a different cultures. Next ethnocentricity is defined as to a person or group believing that their own beliefs, ethnic group, and culture is far superior than others. This belief can lead to different negative effects as to making business globally. One of the ways ethnocentrism can affect ones view of other cultures is by companies not being able to take advantage or utilize resources at its full potential. It makes people omit beneficial characteristics of other cultures. This would be a negative effect when managers undermine other cultures because it would create a “backlash from the local population, its government, or nongovernmental groups” (J. Wild, K. Wild, 44). As an international business person you always have to keep an open mind and not think or create that idea that only your way it’s the best way. This can block you from learning new tactics. For example new marketing techniques to promote a product. Also how to sell a product with a reduction cost to your company. To sum it all up ethnocentricity prevents you from learning new ways, techniques, and teachings from different cultures that can be a benefit to you and your company. It prevents you from getting that knowledge, and even closes down the market doors with everyone. This is due to getting a bad reputation with time and in the end no one would want to work with your company due to your ethnocentric views.

2. What is cultural literacy? Why should business people understand other cultures?
Cultural literacy can be defined as learning about another culture in order to facilitate negotiations, creations of products, the marketing of products, and managing employees. It is to have an education about another culture in order for you and your employees to work happily, comfortably and most important effectively. As a result a manager whose cultural literacy is at high level has a better understanding of its local employees, and brings the company closer to its customers. With this it increases the company’s competitiveness. Another benefit is that managers are able will be able to handle strenuous situations. This types of situations can include alterations while negotiating, or customer service. Secondly business people should understand other cultures due the level of facilitation they achieve. In other words it the process of marketing, administrating and negotiating in another country will become less rocky. The process will be more smoother than having obstacles preventing you or the company from the goals in pursuit. Another reason is that it opens new doors meaning new market opportunities. This could relate in your company expanding, outsourcing or even the selling of a new product line in a new environment. Better yet understanding other cultures can help your company have a better understanding of what people’s beliefs, values, rules, and institutions. This can help in promoting a product or even negotiations. Also being part of a negotiation by being the mediator between one company and another. This will help create business based on how dedicated and educated your company is about other cultures. To sum it all up, business people should understand other cultures in order to have a more long term stable relationships. This relationships lead to better negotiations, opening of new markets and better competitiveness for your company.

3. How do nations-states and subcultures influence a peoples overall cultural image?
I will begin by defining nation states, and subcultures. First what nations states do is promote and support “the concept of national culture by building museums and monuments to preserve the legacies of important events and people” (J. Wild, K. Wild, 42). Nation states are basically are sovereign states that have citizens that are homogenous. This means that the share a common language, or a common decent. For example knowing a state for something, like Texas is known for Longhorns, or the slogan “Don’t mess with Texas”, or even barbecue. Nation states also intervene in businesses to preserve treasures of national culture. One example of this is regulating sensitives sectors of the economy, like filmmaking and broadcasting. Next subcultures are smaller groups of people who share a different culture or way of life within a larger dominant culture. Also people might live in different nations but share the same subculture in another nation can relate more than their fellow nationals. In my opinion I belief a good example of this could be Houston. In many ways Houston is diverse and besides the big Texan culture there are other subcultures within Houston since it is so diverse. For example in the food, like Mexican restaurants, or Tex-Mex. In overall subcultures and nation states influence peoples cultural image through many reasons. One of the reasons is that when you know a culture by a specific thing for example Texas with barbecue, and the bluebonnet you assume that everyone in Texas likes barbecue and the bluebonnet. That could be difficult in marketing a product because that would be considering something about everyone and could affect sales. An example would be a type of barbecue sauce, maybe it might not sell as well due to the fact that possibly not everyone likes barbecue. Nation states, and subcultures create a sense of similiarity between everyone. It would be more like knowing people but not really knowing all of them. This is due to having common traditions but different languages spoken. for example in China not everyone is fluent in mandarin dialect.

Chapter 3:
Q: You are the CEO of a major pharmaceutical firm that holds worldwide patents on several successful drugs. Your company invest heavily to develop its drugs because patents allow it to recoup its investment. But your firm has come under pressure from competitors selling cheaper alternatives, and from politicians and nongovernmental groups to supply drugs to people in poor nations at reduced prices. Several senior executives in your company feel the firm is unfairly being ask to discount its drugs that treat diseases afflicting people of poor nations. Some executives suggested that the firm focus on drugs to treat diseases (such as heart disease and cancer) that occur mostly in wealthy nations, but you are uneasy with such a move. Would such course of action be ethical? Diseases such as AIDS, cancer, and heart disease all kill their victims. In my opinion this would be a tough decision to make as it is a decision that involves your upbringing and your beliefs as a person. This includes values inculcated in to you from what your parents have taught you from right and wrong. Also on the other side as a business person you have to see if your company can withheld the pressure or not. You would have to think also as a business person as well. To honestly answer this question, I would respond as it is ethically wrong to go through with such action, but I would have to see many factors as a business person. I would have to see the percent of inflation, and how the economy is doing. Yes it is ethically wrong but in my opinion as a business person I would ask myself what could I do to save my company. Probably I would like to see some numbers made maybe the other executives are wrong about not discounting the prices for poor nations. Maybe that could help us be more competitive and have a good image towards the community. Also another way to go would be dividing the sales up either promoting the discounted prescriptions for poor nations and the other half with people who have terminal diseases. Another idea would be on a yearly basis. For example one year provide the medicine to the wealthy nations and with that profit we would be able to manage to provide the discounted medicine to the poor nations. It would be a matter of statistics and looking at long run or short run profits as well. This comes towards as to how greedy the company wants to be maybe, it wants profit now just to get more money in its pockets, or the company really need to make some money to stay afloat. In the end, if we needed a decision drastically then I would know if its ethically wrong but, we wouldn’t close down a big medication company just because it is ethically wrong. It may seem harsh or seem like I don’t care but we take in to consideration all factors at hand and in the end we would have to see the possibility in order to keep the company afloat.

1. What are the five main types of political risk? How might each affect international business activities?
The five main types of political risks consist of conflict and violence, terrorism and kidnapping, property seizure, policy changes, and local content requirements. First, in order to understand each type of political risk, we have to understand political risk in general. Political risk is possibility that a society will go through some political changes that will have a negative effect on their business activities. Basically when there is a political change then it has a higher risk that it will affect business activities negatively. The way conflict and violence affects international business activities is through many ways. Some of the ways that it can affect them is by keeping companies from investing in a nation creating disturbances in that nations economy. Also violent brawls can prevent business from manufacturing, get resources and even prevent them from doing a good hiring process. Conflict in this context can come from three origins. First it can be developed from peoples resentment towards government. Second it can arise from areal disagreements or disputes. Lastly it can originate from disputes bwtween different groups along ethnicities, religious groups, and racial. Next Terrorism and kidnapping can have an impact by attacking one of your headquarters or branches in order to make a statement in disagreement with political or social situations or making a political statement. With that it can result in loosing a lot of money or being a target. Just like that you could be a target fo kidnappin where the kidnappers ask for a very high ransom. Kidnappers know the employers of those executives of large international companies will pay a high ransom for them if put through the situation. This affect due to the fact that your company is missing an asset, and become s at a stand still and the company also looses money. Property seizure has an impact through consfication, the taken of assets by government without compensation.Here your whole investment is taken away without any profit and you loose assests. There is also expropriation, where there is some compensation but government decides how much and there is also no framework for legal appeal. In this situation you wouldget some compensation but not what your assest or investment is worth. The compensation is done because it an jepordize investment in the country. Lastly is nationalization where governments takeover the entire industry. This would affect businesses othere companies not investing in your home country making it more difficult to establish global relationships. Policy changes affect a company for example, by decreasing the percentage of ownership in companies and the company will not make as much money as it projected. It can give you a bad image such as being seen as ompairing economic development. Thishappens if you deny to invest in a nation if they reduce ownership percentage. Just like there is a negative side there is a positive side to policy changes that can lead to economic development and better relationships beween your company and other nations in the world. Lastly local content requirements can affect international companies through being force to the hiring of inconpentent workforce or poorly trained, or taking in an excess of workers. Also by making a company to acquire raw material locally can affect production costs and also have a quality decline in its product. These are the ways the five main political risks can affect international business activities.

2. Distinguish among confiscation, espropriation and nationalization.
Consfication is defined as to the taking away or “forced transfer” (J. Wild, K. Wild, 115) of assets from a government without any profit, or earnings made for the company. With this type of property seizure the owner of the company doesn’t have any leagal basis for requesting compensation or the return of the comfiscated assets. Net expropriation is the transfer of assets from owner to government, but this typeof political risk includes compensation. Although it includes compensation, the expropriating government decides the amount of the conpensation. Also there is no actual legal appeal that owners could take action with, and with the deciding of the conpensation its is usually lower than market value. Although it is an option governmets try to prevent to take this course of action since it would affect investment in their country. Although they try to prevent it from happening if governments have to take action they will. One good example is Argentina with the expropriation of 51 percent of the largest energy firm. Lastly a good way to remember nationalization is through the word nation. Nationalization means the takeover of entire firms by government. Large industries that can be involved with nationalization are industries that are important to a nations security and also are those that develop large revenues. Some reasons why governments may nationalize an industry include “to protect an industry for ideological reasons, save local jobs in an ailing industry to gain political clout, control industry profits so they cannot be transferred to low tax rate countries. Lastly invest in sectors, such as public utilities, that pricate companies cannot afford” (J. Wild, K. Wild, 118). A god example of nationalization is the action of President Hugo Chavez in Venezuela, by him nationalizing telephone, electricity, and oil industries. In the end,within a short period of time all three property seizure branches will create jobs, and help the economy. In the long run it will just scare off investors from other countries and the economy would suffer. 3. What three methods can businesses use to manage political risk?
Managing political risk consists of three methods which are adaptation, information gathering, and political influence. First adaptation is the integration of risk in to the strategies a business has. This can be done with the help of local officials. Within this method there are four way to integrate risk to a business strategy. First is partnerships, this help companies balance plans of expansion. This emerging of partnerships can help companies proportion or share the risk of loss. This is crucial in emerging markets. Secondly there is localization. This consist of the product mix, also modifying operations, all to accommodate local tastes and culture. The third way to incorporate risk is development assistance. This entails for an international company to help locals from the host country by improving their way of life. Lastly is insurance, which means a back up as a company is entering a new market. The second way to manage political risk is by information gathering which is about forecasting the political risk by gathering information. Two ways of gathering information is through current employees. This helps companies with insight of a country’s local culture and politics. The second source is through agencies that specialize in providing political risk services. This agencies help companies by publishing reports containing national levels and sources of political risks. The last method is political influence. Political influence is mainly about lobbying. Through lobbying companies have a representation of political matters and where they stand on each concept. Their main goal of lobbyist hired by companies is to get positive legislation enacted and negative legislation rejected. These are the thre methods that business can use to manage political risk.

Chapter 4:
Q: The internet has penetrated many aspects of business and cutlture in developed countries, but it is barely available in many poor countries. Do you think this technology will widen the economic development gap between rich and poor countries? Why or why not? Is there a way for developing countries to use such technologies as tools for economic development?
In my opinion yes it will widen the gap between the rich and poor countries. The reason why I say this is because of the opportunities being missed by the poor countries and, opportunities taken by the rich countries. In my opinion the that inability or the hard acces to the internet by poor countries makes them even more poor. This is because today technology is advancing at a fast pace and everyone who is able to afford it can be the leader. Of course the only ones making money in order to be up to date with the technology are wealthy countries. Poor countries if they don’t have access to the internet, how are they going to be up to date with the technology if they cant acces the internet to be in communication with other countries. Missing out on that opportunity, means that they are missing out on establishing relationships with other countries that they can make negotiations with and enter the global market. Even though those poor countries have access to the internet it will be hard for them to catch up to the level of the walthy countries. If they barely move one step others are five steps ahead already. One good example is the United States and its use of technology and its method of continuing to keep moving forward and getting the latest technology. Here the rich are getting richer and the poorer are getting poorer. Poor countries need to start developing strategies in how to have acces and hpw to use that technology up to its full potential. Possibly by engaging on the popular market of today, by researching, telecommunicating with other countries, offering services. Also by making themselves known that they are there and ready to learn. I see it as a job for example. To elaborate more on this, its like a job because at the beginning they have to be someone’s employee and as they continue to learn and gain the experience needed they can move up the scale slowly but surely. All poor countries have to do is find that big break or opportunity in finding that employer who is willing to give them a chance and hire them.

1. Define economic system. What is the relationship between culture and economics?
An economic system is made up of processes and structures that it puts in to work to designate resources and put in to action its commercial activities. To sum it up an economic systems is pretty much how a country or a nation does business, creates products, and allocates its resources. There is a big connection or relationship between culture and economics. This is because culture can pretty much defines the type of economy a country will have. What I mean is that a country’s culture will define its economic stand. A country’s culture can affect economics through its values. Some examples are of this could that one country might have an inclination to individualism and collectivism. Of course their economy will demonstrate the same as the countrys culture. Another good examples is that one “ culture might prefer theories grounded in individual freedom and responsibility” (J. Wild, K. Wild, 80) which can lead to a capitalist economic system. A country’s economy is created by what its citizens belief in and value. For example a culture might value collectivist ideas and build a socialist or even a communist system. Here the key word to explaining the relationship between economics and culture is build. You can’t just have an economy already there if you are starting like the Europeans and their 13 colonies. They had to see what were the views, values, beliefs, their ethics and what was right from worng for them. Not just for one person but as a nation as unity. As you know and adopt a culture the n you build your economy based on those values, beliefs, ethics, and right from wrong. That’s the relationship that an economy is born from or created from a countrys culture.

2. What is a mixed economy? Explain the origins of mixed economies.
A mixed economy is the equal division of land, factories, and other economic resources between prvate and government ownership. In comparison to a centrally planned economy, a mixed economy the government owns fewer economic resources than the centrally planned economy. Although it has less ownerships, in a mixed economy governments ususally tend to control economic sections that are important to national security and long term stability. These possibly include iron , steel, oil and gas, and automobile manufacturing. Another fact about the mixed economies is that support the unemployment, and provide healthcare for the general population. The origins of a mixed economy come from advocates state that for an economic system to be successful doesn’t only have to meet the lines of being efficient and contemporary but also needs to defend society from individualism and greed. In the end the goal of a mixed economy consists of the achievement of low rate of unemployment, poverty, a steady economic growth and a fair distribution of the riches. Supporters of mixed economies argue and try to inform nations about the way they should have a mixed economy. Those proponents argue that nations shouldn’t, destroy their social welfare. What those nations should do is that they should improve their social welfare so that they can contribute towards the national competitiveness instead. These are the origins of a mixed economy.

3. Identify the main features of each type of legal system (common, civil, and theocratic)
Common law came to be in the eleventh century in England. From there it was adopted in the nations terretories from there and world wide. Common law consists of three elements that define what it is. Those elements are tradition, precedent, and usage. These elements define common law, because through those elements the justice system decides to interpret the law. Tradition is a country’s legal history. Precendednt is about past cases that have gone to court and how they were determined. Lastly usage, describes how laws were used or applied in different situations. One important thing is that contracts who are based of common law tend to be long due to the fact that they have to include and consider many possible outcomes and different interpretations of the law, if a if ever a dispute might arise. Next civil law is a system were it is based on a set of rules. Civil law is a a written set of rules and also statutes that that contain a legal code. A small example could be rules in a classroom for kindergarten students. The rules are clear and it is possible to follow them. Civil law “can be less adversarial than common law beceause there tends to be less need to interpret what a particular law states” (J. Wild, K. Wild, 88). Places where civil law is practiced are Cuba, Quebec, Puerto Rico, Central and Sotuh America, most of the Western Europe, and many nations in Asia and Africa. Lastly theocratic is a law based on religious teachings. There are three strong followers of theocratic law, these include Islamic, Hindu, and Jewish law. The basis of theocratic law is religious teachings, and what each religion or god teaches them through their holy book. Today the one that is widely practiced is Islamic law. It consists of restricting the different types of investments different companies can make and they set rules in order for companies to regulate business transactions. Those are the main features of the each type of legal system.

Chapter 5:
Q: You are a research fellow for Washington d.c based research institute investigating the ethics of restrictions on the international movement of labor. In the practice of international trade, both physical resources and capotal cross international cordes rather freely, whereas labor is is heavily restricted. In fact, it can be extremely difficult for individuals to obtain a permit that allowsthem to be gainfully employed with many countries. Thus although, companies are free to set up production in markets where labor is cheap, labor cannot move to markets where wages are higher. Some argue that this locks people to their poor geographies and gives them little hope for advancement. Why do you think this situation prevails? Is it ethical that of all the components of production, albor is the one most subject to restrictions on its international mobility? Explain. In my opinion, there are many reasons why this situation arises, but I think that the main one is due to the fear of brain drain. Also fear of high percentages of immigration. The last reason is due productions costs. First, I think that the fear of “brain Drain” comes in to my mind because of other nations, For example if doctors are well paid in country a, and doctors in country b are suffering and limited to their poor geographies. With a more free labor mobility, of course doctors of country b will want to go to country a, and this could range from the best doctors that country b might have. With this country b will suffer from a drainage of doctors and decreasing its ability to treat people. This relates to the high percentage of immigration. This due to the fact that if people citizen see that here are less and less doctors for medical emergencies or even check ups, they are going to wonder. Once that is in their mind then they will start immigrating to the country A, where country a will start experiencing an inbalance in their economy as more people start to come in. Examples of inbalance is unemployment rate getting higher because there aren’t enough for everyone, maybe food shortages. Lastly, of course it is not convieniet for busniness or international companies for there to be less restrcitions on the movement of labor due to the fact that they wont find that nation in need of employment and willing to the work for a lower cost. Of course companies benefit for lower production costs and its, in my opnion not ethical for labor to be themost restricted. Yet again you have to think if there are more free labor movement people are going to start moving, immigrating and not returning to their country of origin if they see good opportunities at their country of their stay. It not ethical to restrict people from growing but also you have to take in to consideration of what that could do to countries of the world, in my opinion it would bring chaos, and an economy would collapse.

1. What does the factor porportions theory have to say about a nations imports and exports?
Lets firs begin with what the factor poroportions theory consist of.this theory consists of a countries inmport and export behaviors. The behaviors include that a country exports goods, or fctors that are in abundance in the country. So basically this movement is that the country exports what it produces in plentitude or has an excess of resources. The import behavior in according to the porportions theory is defined as countries import goods needed or import the resources needed for production. In comparison to the comparative advantage theory, the poroprtions theory specifies that countries tend to specialize. With the specialization of countries in goods or resources, the poroportions theory states that “a country specializes in producing and exporting goods using the factors of production that are most abundant and thus the cheapest- not the goods in which it is more productive.” (J. Wild, K. Wild, 145). In other words the proportions theory describes a country’s imports and exports through having the cheapest production cost, and not just focusing on the production amount no matter the money. This is when a country wants to make products that it will trade but at the same time having the least expenses they can. Also the intensity of production based on the factor proportions theory the factor intensities of a country are dependent on the technology and the process of manufacturing a product. So in a country bases its importing and exporting on the factor proportions theory it is being cheap in a way or it is being tactical. It can be cheap in a sense that it is producing products the cheapes way, which in the end its products might not as good of a quality of those of other countries. This can be also a tactical way is by earning profit by reducing costs. In way that you have to export the cheapest product but yet you receive a good product is unfair to other countries as well. The tactics consists of making money by not wasting money. These are ways that the factor proportions theory can affect a countrys imports and exports. 2. Identify the two categories in national resources in factor porportions theory. What is the Leontief Paradox?
Two categories in national resources in factor proportions theory are labor and land and capital equipment. These are the way the theory breaks down a nations resource. The theory anticipates that “a country wil specialize in products that requires labor if the cost of labor is low relative to the cost of land and capital”, (J. Wild, K. Wild, 146). This means that a country will make a product that consists labor or specialize in it as long as it is lower than the cost of land and capital it purchases. It works the alternatively if the country makes a product that requires land and capital, just as long as ther labor for it will cost less. This theory has an inverse relationship with what countries are abundant in the two factors. Next the Leontief Paradox is a study made by Wassily Leontief, in the 1950s. It tested the U.S, who uses in abundance of capital equipment, exports good which require capital intensicve production, and import goods requiring labor-intensive productions. The results were the opposite of what the factor proportions theory stated. The results werer that the exports the United States make require more labor intensive production than its imports. So basically the test consisted if the united states exported products and imported products requiring the same labor-intensive production just like the Factor Proportion theory stated. As a result Leontiefs paradox is mainly showing the opposite results, or the contrary to the theory. “ The apparent paradox between the predictions using the theory and the actual trade flows is called the Leontief Paradox” (J. Wild, K. Wild, 146). Although is the contrary to the theory, the reason for the contradiction is that the theory takes only into consideration that a country’s production factors to be homogenous- mainly relating with labor. As far as we are informed we all know that the labor skills between each person are at different levels within a country. Once expenditures on improving the skills of workers are taken in to account the theory will be supported by the actual trade data.

3. What are the three stages of the international product life cycle theory? Identify its limitations.
The three stages of the international life embody the new product stage, the maturing of the product stage and lastly the standardized product stage. Now lets begin with the first stage and its contents. The first stage, which is the new product stage describes the introducing of a new product concept, du to the high purchasing power, and demand. Although in this stage there is a new product being introduced, the demand in the market is highly uncertain. This keeps production low while staying in communication with customers because if the need or wants of the customers change it is easy for the company to modify the product easily. Stage two is the maturing product stage. This is were the domestic market and markets abroad become aware of the new product that was introduced and the benefits it will provide the customers. This is like the climax of a product were people start to find out about the product, and are intrigued because it’s a new product that they haven’t seen. Due to this, the product is sustained over a fairly lengthy period of time. As the demand increase companies can start introducing the production facilities to the countries with the highest demand. At the end of this stage the product begins to create profit through the sales in developing nations and there is a pronbability that manufacturing would begin in those nations. The last stage is the standardized product stage, the competition of the product begins, this begins if other companies are selling similar products. This creartes pressure towards the company and they are pressured in to lowering their prices in order to maintain the same level of sales. As an effect for the sensitivity of prices the company then searches for low cost production, as the product stage moves along domestic production might cease in the end. The limitations of the theory are

Wild, John J., and Kenneth L. Wild. International Business. 8th ed. Pearson Education,Inc., 2014. Print.