Bell Ringer

What is the sale price of an item that is $179.99 and is 15% off?

Bell Ringer Answer

$179.99 * 0.15 (15%) = $26.9985 -> $27.00

$179.99 - $27.00 = $152.99

The sale price of the item would be $152.99

Agenda

Bell RingerFashion and Economics LectureQuizlets Flash Cards

Learning Targets

Explain how globalization has affected the fashion industry.

Describe the impact of the fashion industry on the US and world economies.

Explain the relationship between supply and demand.

Vocabulary

Globalization ImportsExportsBalance of TradeSupplyDemandProfitTrade Quotas

Globalization

The increasing integration of the world economy. Countries are no longer limited by their own

borders. Citizens of most countries are able to shop for and enjoy products from around the world.

Apparel ShoppingCountry Shopping Trips per Year Average Spent Per Year

United States 22 $1,044

United Kingdom 18 $1,144

Germany 16 $1,312

Hong Kong 16 $1,260

Korea 15 $520

Taiwan 11 $1,000

France 11 $856

Ital 11 $852

Japan 8 $884

Brazil 7 $776

Global Competition

Globalization has created increased competition between countries in the manufacturing sector on fashion. Countries with lower wages have an advantage

over countries with high wages.Many foreign governments offer incentives,

such as favored status and tax exemptions to make their country more appealing to manufacturers/

Global Competition

Average Cost to Make a T-Shirt in America: $11

Average Cost to Make a T-shirt in China: $2

The Balance of Trade

Textiles and trade have been a major issue in US trade arrangements with a number of countries and regions. Trade involves imports, exports, and exchanges

for money.

The Balance of Trade

Imports Goods that come into a country from foreign sources or goods that a country buys from other countries.

The United States is the largest consumer market of apparel goods in the world, yet only 3% of our apparel in made in the United States.

The Balance of Trade

Exports Goods that a country sends to a foreign source or goods that a country sells to other countries.

The Balance of Trade The relationship between a country’s imports and exports,

and it affects the economic health of a country. A trade deficit occurs when a country imports more goods

than it exports. The United States has a large trade deficit US exports of $183.3 billion and imports of $225.3 billion

resulted in a goods and services deficit of $42.0 billion. A trade surplus occurs when a country sells more goods to

other countries than it buys. China has a trade surplus. China reported a trade surplus equivalent to 26.7 Billion USD in

August of 2012.

Trade Agreements and Restrictions

Free trade exists when a government allows products to move freely across its borders.

NAFTA and WTO

The North American Free Trade Agreement is between the US, Canada, and Mexico. Enables free trade by eliminating or reducing

tariffs, or fees, for trading goods.The World Trade Organization is an

international organization that promotes and enforces trade laws and regulations. 145 member countries

Impacts on Domestic Economy

US consumers spend $275 billion every year on apparel.

Includes: $3 billion on slacks or pants $5.7 billion on shirts or blouses $370 million in sweaters

Textile Industry Impact

Approximately 1 million employees work in the US textile segment representing 6% of all US manufacturing industries.

Supply and Demand

The law of supply and demand affects pricing in the fashion industry.

Supply Quantity of product offered for sale at all possible prices.

Demand The consumer’s willingness and ability to buy and/or use products.

Supply and Demand

If supply is up and the demand is low then the price will decrease.

If the supply is low and the demand is high then the price will increase.