Economics 220

Unit 4 DB Eco220

Pure, Per Se and Natural Monopolies

An imported item is an item brought in from another country for the purpose of reselling them in another country. Walmart imported 7.3million pounds of clothing from Saipan from 1994-1998.

An exported item is one that is transported from one country to another for the purpose of sale or trade. Saipan exports the clothing to Walmart and other countries.

I would buy imported clothing items from Saipan and resale them domestically. Imported items are made for a fraction of the price of items made in America. All the labor costs, medical benefits, human resources issues and company policies are the responsibility of the exporting country. The exporting country is better equipped to handle legal issues that arise related to labor abuse and government intervention. An employee may approach his supervisor and tell him he needs to take a bereavement day to attend his Step-Fathers funeral. Company policy might dictate that employees are not granted a bereavement day for non immediate family members. The exporting company now has a disgruntled employee on their hands and you are back in the states drinking Long Island ice teas and watching Dancing with the Stars. Who wants that kind of drama.

OSHA may arrive at the front door of your business for a surprise safety inspection. They might find infractions and shut down your operations. The exporting company’s manager may encounter the same problem. He slides the inspector $200 which is more than he makes in a month and all problems are solved. Managing hundreds of employees and the problems that come with a large work force is challenging. Buying imports comes with a lot less headaches than purchasing domestically because the cal environment in foreign countries is a lot more relaxed than her in America.

I would argue that this strategy is utilized by Walmart and Target and both companies have proven to be extremely lucrative....