A company in China manufactures basketballs. A company in the United States buys the basketballs and resells them to people there. What term best describes the U.S. company?
A importer
B exporter
C producer
D consumer (?)
Please look up the meanings for the four words you are to choose from.
http://www.dictionary.com
Nina:
You can easily eliminate two of these answers:
B. can be eliminated because you are not sending anything out of the country so you are not the exporter
C. can be eliminated because you are not producing the basketballs
That leaves you with A. and D.
If you look at definition of importer - it means to bring in something from a foreign country to sell. Now look at definition of consumer
The answer is a.
The term that best describes the U.S. company in this scenario is A) importer.
To determine the correct answer, let's understand the roles of each term in the context of international trade:
1. Importer: An importer is a company that brings goods into a country from another country for the purpose of reselling them domestically. In the given scenario, the U.S. company purchases basketballs from the Chinese manufacturer and brings them into the United States to resell them to people there.
2. Exporter: An exporter is a company that sells goods produced in its home country to customers in another country. In this scenario, the U.S. company is not producing the basketballs; it is buying them from a Chinese manufacturer to sell domestically rather than exporting them.
3. Producer: A producer is a company that manufactures or produces goods. In this scenario, the Chinese company manufacturing the basketballs can be considered the producer.
4. Consumer: A consumer is an individual or company that purchases goods or services for personal use or for use within their own business operations. While the U.S. company does eventually sell the basketballs to individuals in the United States, the U.S. company itself is not the end consumer in this case.
Considering these definitions and the given scenario, the U.S. company can be identified as the importer as it purchases basketballs from a foreign manufacturer and resells them domestically.