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| 1 | |
_________________ occurs when a country has a monopoly on producing a product or is able to produce it at a cost below that of all other countries. |
| | A) | Comparative advantage |
| | B) | Absolute advantage |
| | C) | Functional advantage |
| | D) | Bilateral advantage |
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| 2 | |
Monica, a Canadian resident, was surprised to see that her home computer was actually made in Japan. Monica did not know she had purchased a(n): |
| | A) | imported item. |
| | B) | exported item. |
| | C) | protected item. |
| | D) | undifferentiated item. |
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| 3 | |
Last year, the nation of Homeland reported that it had a favorable balance of trade even though it imported $11 billion worth of goods. It is obvious that Homeland: |
| | A) | exported $11 billion worth of goods. |
| | B) | exported more than $11 billion worth of goods. |
| | C) | overpriced the value of its exports. |
| | D) | exported less than $11 billion worth of goods. |
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| 4 | |
Doing business globally requires an awareness of the cultural diversity among nations including values, beliefs, ______, and ______. |
| | A) | rules, institutions |
| | B) | environmental normality, strategic alliances |
| | C) | regulatory strictures, socioeconomic troughs |
| | D) | psychosocial forces, affective dimensions |
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| 5 | |
Firms such as Tim Hortons, have entered the global market by offering investors the opportunity to set up: |
| | A) | licensed trade offices. |
| | B) | international trade activities. |
| | C) | multinational subsidiaries. |
| | D) | franchises. |
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| 6 | |
In the nation of ESPN-land, workers prefer to be directed and told specifically what to do by their managers. Employees in the Canada prefer to participate in decision making in the workplace. This _________________ difference between ESPN-land workers and Canadian employees represents a management challenge for firms trading in global markets. |
| | A) | environmental |
| | B) | economic |
| | C) | sociocultural |
| | D) | regulatory |
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| 7 | |
Setting restrictive standards that make it difficult for foreign firms to sell products in a country is an example of establishing: |
| | A) | nonmonetary tariffs. |
| | B) | countertrade policies. |
| | C) | nontariff barriers. |
| | D) | export embargo. |
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| 8 | |
Responding to pressure from political lobbyists representing the steel industry, the Canadian government levies a tax on steel products imported from Asia. This is an example of a(n): |
| | A) | protective tariff. |
| | B) | revenue tariff. |
| | C) | nontariff barrier. |
| | D) | embargo. |
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| 9 | |
Eve’s Fruit, Inc. sells all of the apples from its orchards in the Niagara region to one buyer in Japan. Eve derives all of its profits from these international sales. Eve’s Fruit, Inc.: |
| | A) | is a clear example of a multinational corporation. |
| | B) | is not a multinational corporation. |
| | C) | is contributing to the U.S. balance of trade deficit. |
| | D) | will benefit greatly from trading euros. |
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| 10 | |
For firms interested in global markets, investments in China are considered to be: |
| | A) | too risky. |
| | B) | impossible given the current government. |
| | C) | an emerging business opportunity. |
| | D) | of little profit potential. |
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| 11 | |
Establishing a foreign subsidiary as a strategy for reaching foreign markets has advantages and limitations. Its advantages include _____, and its limitations include___________. |
| | A) | multinational propriety, expaternalism |
| | B) | control over its technology and/or expertise, the possibility of expropriation |
| | C) | home rule, host roost |
| | D) | profitability ratios, manufacturing capacity |
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