A furniture company in the United States manufactured sofas using fabric made in South Korea, furniture frames made in Texas, and cotton stuffing made in China. The company didn’t sell the sofas in retail locations in Europe. Which of the following is an export for the US company in the scenario?
Answer (2)
In the given scenario, the furniture company is located in the United States and manufactures sofas using materials sourced from various countries. An export is a good or service that is produced in one country and sold to buyers in another.
Since the company is located in the United States, any product that they sell to buyers outside the United States would be considered an export.
Analyzing the scenario:
Manufacturing Location : The sofas are manufactured in the United States.
Materials :
Fabric from South Korea
Furniture frames from Texas (part of the United States)
Cotton stuffing from China
Sales Information : The company did not sell sofas in retail locations in Europe.
The key information here is that the company is not selling sofas in Europe, which is a foreign market. However, this does not exclude the possibility that they might sell to other foreign markets.
Without additional information, based on the fact that the company manufactures in the U.S. using both domestic and international materials, their main export would be any sofas they sell to buyers outside the United States.
Therefore, if the U.S. company sells any of its sofas to buyers internationally (outside the U.S.), those sales would be considered exports. Since the scenario mentions they didn't sell in Europe, it implies a need to identify exports elsewhere in the international market.
In summary, the sofas themselves, if sold by the U.S. company to international markets other than Europe, would be the exports. Since no specific regions are mentioned, we must assume that the main export is the sofa when sold outside of the United States.
The export for the U.S. company would be the sofas it sells to buyers outside the United States. Although the company does not sell in Europe, it can still export to other international markets. Therefore, any sofas sold to customers in other countries should be considered exports.
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