Essay Question 1 You have been engaged as an advisor for a developing country. You are asked the following question: Should the country have a strategy of import substitution or specialization? Explain each of these concepts and the theory of comparative advantage in your answer. Using the theory of comparative advantage come to a conclusion as to which strategy the country should use. Essay Question 2 Select only three of the five choices below and explain what each is and what role each plays in international trade: a. NAFTA and the EU Answer: b. Climate and the two components of culture Answer: c. According to the video for week four what is the impact on exports and imports of a weaker dollar? What countries does the video indicate may not want a weaker dollar and why? Answer: d. From the video from week one discuss Karma as it relates to international business AND from the video for week three, discuss why there are language issues even though English is the language of a potential foreign market. Answer: e. Country Risk Assessment and Traditional Hostilities in a country Answer: Essay Question 3: If the exchange rate of the dollar and the Euro goes from one Euro equals $1.22 cents in 2010 to one Euro equals $1.33 in 2011, has the dollar strengthened or weakened and why? If this happens, what is the impact on importers to the U.S. from the EU and on exporters from the U.S. to the EU? Essay Question 4: Name and explain the concept of tariff barriers and name and explain one reason countries maintain trade barriers, such as tariffs, and state whether or not this reason is justified and why or why not. What is the impact of these barriers on the efficient allocation of a country’s resources? What is the impact on the consumers that purchase the items to which the barriers apply? Answer: Textbook: International Business: The Challenge of Global Competition Author: Ball / Geringer / McNett / Minor Edition: 13TH ISBN 13: 978-0-07-760612-1 Publisher: Richard D. Irwin, Inc.