Question

Using the purchases you have made over the last year, describe the products you have purchased which came from outside the U.S. Discuss why you feel these products were imported into the U.S. market. Explain who benefits from these products being imported. Discuss who has lost out because of these imports. Analyze the gains from trade with the aid of the theory of comparative advantage

Answer 1

Imports and exports are the common phenomenon in the present world’s economy. No economy is self-sufficient and it has to import many products and services while export to fulfill its own and other economy’s requirements.

If we look at the USA, the two most commonly imported products and services are as below:-

Apple iPhone

Application Software used by business organization

If we look at the Apple iPhone, the phones of the brand are now being manufactured and assembled in China and then from there, these products are distributed all over the world. This is mainly done due to the lower production and labor cost in China because of which the price of the phone remains at a lower level.

The main individuals who are going to be benefitted by this imports are the common customers and iPhone manufacturers as the customer has to pay less for the products as it is being made at lower production cost in China while these are the labors of the USA who are at a disadvantage as they are losing the job opportunities.

In the case of Application software used in the business organization, these are programmed mostly in India due to their expertise in the field and cheap programming cost. The software firms in the USA are at disadvantage from this imports.