Question

Once a car manufacturer has decided which components and raw materials will be made in-house, a location decision will need to be made. This consists of determining if the making will be done at one or more production facilities and if these facilities should be located in one or more countries. Tariffs, preferential duties, and nontariff barriers are all factors for these manufacturers associated with which location consideration?

a. Capital investments
b. Infrastructure
c. Political considerations
d. Trade policies

Answer 1

The consideration for location decisions that involves tariffs and duties pertains to trade policies. Manufacturers weigh these against other factors like costs, infrastructure, and government efficiency in choosing a factory site.

Step-by-step explanation:

Trade policies:

The factors associated with location consideration that include tariffs, preferential duties, and nontariff barriers are all related to trade policies. When a car manufacturer decides on the location for production facilities, they must consider a wide range of factors. These include the costs of labor and financial capital, proximity to reliable suppliers and customers, and the quality of the infrastructure, which encompasses transportation, communication, and power networks.

The levels of taxation, environmental regulation costs, and the competence of the local government are other essential factors. However, trade policies such as tariffs and nontariff barriers play a significant role in the decision-making process because they can significantly affect the cost of importing and exporting goods. Determining the right location is a complex decision where manufacturers weigh all these factors to ensure profitability and efficiency.