Question1. To what countries did Mr. Sanchea export his devices?In some countries, export-oriented industries are the primary source of employment. What are the advantages and disadvantages of relying heavily on exports? How might a strong export-oriented economy affect employment? Can you think of an example in which a country relies almost completely on the export of one good? How has this affected the country?2. What products discussed in the case study were imported into the United States? how did this affect Mr. Sanchez?What imported products are available in your community? Is there any additional value associated with the importation of any of these products (i.e, Frech wine, Italian shoes, Japanese electronics)? What effect on a country's culture might result from the widespread availability of imported goods and services? -+ 60%Sanchez Electronic Devices-A Case StudyRoberto Sancbez worked for 20 years as an engineer and manager in a factory inDearbom, Michigan After he left the company, he had a number of decisions to makesuch as: What would he make? Where would he locate his factory? Where would he sellhis product?After extensive research, Mr. Sanchez detemined that he would build a small factorymaking a newproduct a small tool useful for making personalized computeridentification tags. Mr. Sanchez had experience in this sort of product, and bad manyfiends in the United States and overseas who might be interested in the device. He builthis factory in the middle of Cleveland, Ohio, where he knew he could get raw materialscheaply, the wvorkers he would hire would be well-educated and hard-working, andtransportation and communication networks would help him sell his device wherever itwas WantedMr. Sanchez prospered for many years. Although he sold most of his devices in the firstfew years to local computer dealers, over time be found the greatest interest in Japan andIndia for his product. Eventually, most of Mr. Sanchez' devices were exported to thesecountries. His factory expanded its production, and he and his employees were amplyrewarded.Although competitors in these countries tried to make similar devices and sell them, noone could match Mr. Sanchez' quality nor the service be provided. In addition, becausethe United States was in a recession at the time, the U.S. dollar was not worth as muchoverseas (compared to other currencies). A weak dollar meant that foreign purchaserswould get more for their money, and they were therefore eager to do business withAmerican exporters. American business people, on the other hand, could not import asmuch as they wvould have liked because their money was not worth as much in thesecountries.A dilemma faced Mr. Sanchez, however, over the next few years. The continued successof his device encouraged others to make similar devices, and though not of the samequality, they forced him to lower prices in order to compete more effecuvely. N lany ofthe workers had been with Mr. Sanchez since the beginning and their pay had been raisedto the point where he had a hard time making much profit. Finally, as the U.S. economythey could not make as much money reselling the items in their stores. In response tothese challenzes. Mr. Sanchez tmed to find a way to lower hs costs. Otheryee, he wouldhave loet monev and been forced to close down his business,Throughout the development of his business, Mr. Sanchez had kept a close eve ongovemment trade poicies. Early on, the govemment encouragedM. Sanchez by helpinghim make busimess conmecticns in Japan and India. The govemment forcedimporterswith derices eimilar to r. Sanchez to pay a mall tax on each item broueht nto the United States. This tariff increased the cost of the foreign goods, and helped Mr. Sanchezin the early days of his business.Over time, bowever, U.S mporters began to complain about these taniffs. TheseImporters claimed that the tariffs not only raised the cost of the devices made overseas,but since Mr Sanchez could not make enouzh of the products in thbe United States,Americans vwere not able to get as many of the devices as they needed. The U.S.Bovermment eventually decided that, althouzh Mr. Sanchez deserved to make a profit.based on his hard work, American buvers should not have to suffer with the high importtariff. The goremment, therefore, eliminated the tariffMr. Sanchez faced a real crsis, His sales to other countres were dropping rapidlybecause his device was no longer that inexpensire and Indian and Japanese busbesspeople had started to match his quality. Furthermore, hbis sales in the United States wereno longer assured because now the Indian and Japanese devices were being sold in theUnited States for less than he could afford to make them.Althouzh MMr. Sanchez could not change the govemment's decision to reduce the tarifhe could make some decisions to help his company. After looking at the facts, Mr.Sanchez rearetfully closed his factory in Cleveland and opened a new one in CiudadJuarez, Mexico, just over the border from El Paso, Texas. He found that he could payskalled workers half of what he had to pav in Cleveland. He also decided to reduce theWith these substantial changes, Nr. Sanchez was able to reduce his costs. make a smallprofit, and stayn the business he loved.

1. To what countries did Mr. Sanchea export his devices? Sanchez exported devices of personalized…

Answered: Question 1. To what countries did Mr.…

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Chapter1: Making Economics Decisions

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