Travels of a T-Shirt
Travels of a T-Shirt
Prologue
1. Describe Sherry Manufacturing Company-give a description.
• Sherry Manufacturing is a T-shirt screen printing business in Florida.
2. From whom does Gary buy his t-shirts?
• They import their t-shirts from China.
3. Who is Patrick Xu?
• Patrick is a cotton t-shirt producer that exports t-shirts to Sherry Manufacturing.
Chapter 1
1. How big is the Reinsch farm? How many t-shirts can be produced from the cotton?
• 1000 acres
• 5000 lbs of cotton that equals 1.3 million t-shirts.
2. Is a country’s comparative advantage permanent? Give some examples.
• No it is not permanent, unless other countries have the right climate. Also, low barrier entries help and lack of product differentiation help maintain an advantage right now. Labor cost however, could potentially cause a threat since they are so high in America.
3. What does Michael Porter say about industries like cotton?
• They have low average returns on investments, accessible to many competitors, and nations in the competitive market will continually face competition.
4. How has the American cotton farmer insulated himself from competition and risk?
• They receive government subsidies unlike the poor countries that compete with them and also they figured out how to compete and avoid risk in the market.
Chapter 2
1. Cotton and industrial revolution? Explain.
• Entrepreneurial developments allowed the spurt of the industrial revolution with inventions like the spin wheel.
2. What was the relationship between technology, productivity and prices?
• Technology allowed more production and with more production allowed cost to go down making it hard to compete with.
3. What role, or lack of, did competitive labor markets play in the success of farmers? What was the source of the farmer’s success?
• They barely
Prologue
1. Describe Sherry Manufacturing Company-give a description.
• Sherry Manufacturing is a T-shirt screen printing business in Florida.
2. From whom does Gary buy his t-shirts?
• They import their t-shirts from China.
3. Who is Patrick Xu?
• Patrick is a cotton t-shirt producer that exports t-shirts to Sherry Manufacturing.
Chapter 1
1. How big is the Reinsch farm? How many t-shirts can be produced from the cotton?
• 1000 acres
• 5000 lbs of cotton that equals 1.3 million t-shirts.
2. Is a country’s comparative advantage permanent? Give some examples.
• No it is not permanent, unless other countries have the right climate. Also, low barrier entries help and lack of product differentiation help maintain an advantage right now. Labor cost however, could potentially cause a threat since they are so high in America.
3. What does Michael Porter say about industries like cotton?
• They have low average returns on investments, accessible to many competitors, and nations in the competitive market will continually face competition.
4. How has the American cotton farmer insulated himself from competition and risk?
• They receive government subsidies unlike the poor countries that compete with them and also they figured out how to compete and avoid risk in the market.
Chapter 2
1. Cotton and industrial revolution? Explain.
• Entrepreneurial developments allowed the spurt of the industrial revolution with inventions like the spin wheel.
2. What was the relationship between technology, productivity and prices?
• Technology allowed more production and with more production allowed cost to go down making it hard to compete with.
3. What role, or lack of, did competitive labor markets play in the success of farmers? What was the source of the farmer’s success?
• They barely