Exam One GEB

Jancy and Kevin are competing for a promotion. Hoping to sway her manager to promote her over Kevin, Jasmine gives her manager an expensive watch. This is an example of

Bribery

Which of the following statements is true regarding business ethics and social responsibility?

Companies can be both profitable and socially responsible. Many consumers and social advocates believe that businesses should not only make a profit but also consider the social implications of their activities. Socially responsible businesses win the trust and respect of their employees, customers, and society and, in the long run, increase profits.

Which of the following statements is true about dumping?

Dumping permits quick entry into a market. Dumping is the act of a country or business selling products at less than what it costs to produce them. Dumping permits quick entry into a market.

Which of the following statements is true about businesses and profits?

Earning profits contributes to society by creating resources that support social institutions and government. Earning profits contributes to society by creating resources that support our social institutions and government. Businesses that create profits, pay taxes, and create jobs are the foundation of our economy.

Which of the following is true about the role of the Federal Trade Commission's Bureau of Consumer Protection?

It protects consumers against unfair, deceptive, or fraudulent practices. The role of the Federal Trade Commission's Bureau of Consumer Protection exists to protect consumers against unfair, deceptive, or fraudulent practices.

Which of the following is an advantage of using an export agent?

The firm does not have to deal with paying tariffs and handling paperwork. An advantage of trading through an agent instead of directly is that the company does not have to deal with foreign currencies or the red tape (paying tariffs and handling paperwork) of international business.

Which of the following is true of multinational corporations (MNCs)?

They are the highest level of international business involvement. which operates on a worldwide scale, without significant ties to any one nation or region. MNCs are more than simple corporations. They often have greater assets than some of the countries in which they do business.

Even when products are standardized, advertising often has to be modified to adapt to local cultures.

True

Which of the following statements is true of business ethics?

Which of the following statements is true of business ethics?

Which of the following is one of the most common factors that executives give for an increase in turnover?

a lack of transparency among company leaders Three of the most common factors that executives give for why turnover increases are employee loss of trust in the company, a lack of transparency among company leaders, and unfair employee treatment.

International business involves the buying, selling, and trading of goods and services across national boundaries.

true

Carlos speaks fluent Spanish, and English is his second language. When communicating with his colleagues, Jennifer and Kim, he uses words that are normal in his language, but they consider them to be profanity. What does this exhibit?

Abusive behavior is difficult to assess and manage. Abusive behavior is difficult to assess and manage because of diversity in culture and lifestyle. If you are using words that are normal in your language but that others consider to be profanity, intent can determine whether you've insulted, abused, or disrespected them or if it was simply a mistake.

All of the following are examples of multinational strategy EXCEPT

American clothing companies use social media sites to connect with global customers. Multinational strategy involves customizing products, promotions, and distribution according to cultural, technological, regional, and national differences. McDonald's McPork sandwiches; soap and detergent manufacturers' products catered to local conditions, equipment, and habits; Colgate-Palmolive Company's inexpensive, plastic, hand-powered washing machines; and advertising modified for language and cultural differences are all examples of multinational strategy.

Which of the following is an argument that supports social responsibility?

As members of society, businesses and their employees should support society through taxes and contributions to social causes.

How do the terms business ethics and social responsibility differ from each other?

Business ethics relates to an individual's or a work group's decisions that society evaluates as right or wrong, whereas social responsibility concerns the impact of the entire business's activities on society. Although many people use the terms social responsibility and ethics interchangeably, they do not mean the same thing. Business ethics relates to an individual's or a work group's decisions that society evaluates as right or wrong, whereas social responsibility is a broader concept that concerns the impact of the entire business's activities on society.

Which of the following is true of offshoring?

Companies may choose to offshore to take advantage of lower wages, skilled labor, or time zone differences. Companies may choose to offshore to take advantage of lower wages, skilled labor, or time zone differences that allow them to offer services around the clock. Institutions may engage in offshoring instead of outsourcing because it allows them to have more control over international operations; the offshore office is an extension of the company.

The European Commission investigated Google to determine whether it promoted its own search results over those of other search engines in spite of their relevance. The aspect of fairness at issue here is

Competition One aspect of fairness relates to competition. Companies sometimes attempt to gain control over markets by using questionable practices that harm competition. The European Commission investigated Google to determine whether it was promoting its own search results over those of competitors in spite of their relevance.

Which of the following is MOST true of product availability in a communist system?

Consumers have a limited choice of goods and services. In a communist system, consumers have a limited choice of goods and services; prices are usually high.

________ is the price at which the number of products that businesses are willing to supply equals the number of products consumers are willing to purchase at a point in time.

Equilibrium Equilibrium price is defined as the price at which the number of products that businesses are willing to supply equals the number of products consumers are willing to purchase at a point in time.

Dinar noticed that one of his colleagues arrives late and leaves early from work every day. In deciding whether or not to report this behavior, what must he do first?

Evaluate the ethics of his choice and decide whether to ask for guidance The question of whether or not to report his colleague requires Dinar to evaluate the ethics of his choice and decide whether to ask for guidance.

How are profits handled in communist systems?

Excess income goes to the government. In communist systems, excess income goes to the government. The government supports social and economic institutions.

Which of the following is a characteristic of the marketing economy phase of the American economy?

Expensive goods, such as cars and appliances, could be purchased on a time-payment plan.

The concept of social responsibility is now universally accepted.

False Although the concept of social responsibility is receiving more and more attention, it is still not universally accepted.

Corporate regulation refers to the laws and regulations that govern the conduct of business.

False Business law refers to the laws and regulations that govern the conduct of business. Many problems and conflicts in business could be avoided if owners, managers, and employees knew more about business law and the legal system.

Codes of ethics should be extremely detailed in order to take into consideration most situations that could result in an ethical problem for an employee or company.

False Codes of ethics do not have to be so detailed that they take into account every situation, but they should provide guidelines and principles that can help employees achieve organizational objectives and address risks in an acceptable and ethical way.

Social responsibility is the extent to which businesses meet the legal, ethical, economic, and voluntary responsibilities placed on them by their various stakeholders.

False Corporate citizenship is the extent to which businesses meet the legal, ethical, economic, and voluntary responsibilities placed on them by their various stakeholders. It involves the activities and organizational processes adopted by businesses to meet their social responsibilities.

GDP measures those goods and services made within a country and profits from companies' overseas operations.

False GDP measures only those goods and services made within a country and therefore does not include profits from companies' overseas operations.

Mario owns a company that manufactures bicycle parts. He sells his goods to foreign markets. This is called importing.

False Importing is the purchase of goods and services from foreign sources.

The World Trade Organization agreements were rejected by most of the world's trading nations.

False Key to the World Trade Organization are the WTO agreements, which are the legal ground rules for international commerce. The agreements were negotiated and signed by most of the world's trading nations and ratified by their parliaments.

Labor unions create a barrier to achieving safety in the workplace.

False Labor unions have made significant contributions to achieving safety in the workplace and improving wages and benefits.

The functions of management are decision making, leadership, and the implementation of work tasks.

False Management involves the functions of planning, organizing, leading, and controlling.

Multinational corporations (MNCs) rarely get targeted by activists because they provide so many benefits to the countries in which they do business.

False Multinational corporations (MNCs) have been targeted by antiglobalization activists at global business forums, and some protests have turned violent. MNCs are criticized on the grounds that they increase the gap between rich and poor nations, misuse and misallocate scarce resources, exploit the labor markets in less-developed countries (LDCs), and harm their natural environments.

While ethical behavior can enhance a company's reputation, it often has a negative effect on the company's financial performance.

False Research has shown that ethical behavior can not only enhance a company's reputation but can also drive profits.

The Association of Southeast Asian Nations (ASEAN) effectively united Singapore, Britain, and Japan into one market.

False The Association of Southeast Asian Nations (ASEAN), established in 1967, promotes trade and economic integration among member nations in Southeast Asia, including Malaysia, the Philippines, Singapore, Thailand, Brunei Darussalam, Vietnam, Laos, Indonesia, Myanmar, and Cambodia.

John's logging business is reliant on the land on which the trees are grown, the people who work for him, and the capital it takes to run his business. Together, these make up his natural resources.

False The factors of production consist of the land, labor, capital, and enterprise used to produce goods and services.

Trade deficits can help businesses succeed, create more jobs, and improve the standard of living.

False Trade deficits are harmful because they can mean the failure of businesses, the loss of jobs, and a lowered standard of living.

According to Adam Smith, competition hinders efficiency and low prices by forcing producers to offer the best products at the highest price.

False, According to Adam Smith, competition fosters efficiency and low prices by forcing producers to offer the best products at the most reasonable price

Contractions of the economy lead to inflation.

False, Contractions of the economy lead to recession—a decline in production, employment, and income.

Owners have little responsibility to provide funds for the operation of the business.

False, The primary responsibility of the owners is to provide financial resources for the operation of the business.

People in the entertainment industry claim that requiring warning labels on movies and video games violates their ________ right.

First Amendment People in the entertainment industry claim that requiring warning labels on movies and video games violates their First Amendment right to freedom of expression. Other consumers believe that labeling is needed to protect children from harmful influences.

To reduce its tax rates, Mootown Burgers moved its headquarters to a country with a lower tax rate. This is an example of tax

Inversion This is an example of tax inversion, in which companies in countries with high corporate tax rates move their headquarters to countries with lower tax rates. Doing so saves them millions in taxes.

Which of the following is true of the Dodd-Frank Act passed by the U.S. Congress in 2010?

It encourages whistleblowers to provide information about corporate misconduct through monetary rewards. In 2010, Congress passed the Dodd-Frank Act, which includes a 'whistleblower bounty program.' The Securities and Exchange Commission can now award whistleblowers between 10 and 30 percent of monetary sanctions over $1 million.

Which of the following is true of the World Bank?

It finances construction projects in underdeveloped and developing countries. The World Bank loans its own funds or borrows funds from member countries to finance projects ranging from road and factory construction to the building of medical and educational facilities. The World Bank and other multilateral development banks are the largest source of advice and assistance for developing nations.

Joachim lives and works in a communist country. Which of the following statements is true about a communist economy?

It is characterized by the people (through the government) owning and operating most businesses. In a communist economy, the people (through the government) own and operate all businesses and factors of production.

Which of the following is a characteristic of a service economy?

It is devoted to producing services that make life easier for busy consumers. Time-pressed Americans are increasingly paying others to do tasks they used to do at home, like cooking, laundry, landscaping, and child care. These trends have gradually changed the United States to a service economy—one devoted to the production of services that make life easier for busy consumers.

Which of the following is done by the American government to counteract economic contraction?

It may reduce interest rates. When the economy is contracting and unemployment is rising, the federal government through the Federal Reserve Board tries to spur growth so that consumers will spend more money and businesses will hire more employees. To accomplish this, it may reduce interest rates or increase its own spending for goods and services.

Which of the following is true about the Association of Southeast Asian Nations (ASEAN)?

It will not have fully-free labor flows between member-nations. The Association of Southeast Asian Nations (ASEAN) plans to increase economic integration by 2015, but unlike the European Union, it will not have a common currency or fully free labor flows between member-nations. In this way, ASEAN plans to avoid some of the pitfalls that occurred among nations in the EU during the latest worldwide recession.

________ gather information and conduct research to determine what customers want. They also plan and develop products and make decisions about how much to charge for their products and when and where to make them available.

Marketers Marketing includes all the activities designed to provide goods and services that satisfy customers' needs and wants. Marketers gather information and conduct research to determine what customers want. They also plan and develop products and make decisions about how much to charge for their products and when and where to make them available.

Which of the following is true about the General Agreement on Tariffs and Trade (GATT)?

More than 100 nations abided by its rules. The General Agreement on Tariffs and Trade (GATT), originally signed by 23 nations in 1947, provided a forum for tariff negotiations and a place where international trade problems could be discussed and resolved. More than 100 nations abided by its rules. GATT sponsored rounds of negotiations aimed at reducing trade restrictions. The most recent round, the Uruguay Round, further reduced trade barriers for most products and provided new rules to prevent dumping.

Which of the following is true of an open economy, like that of the United States?

Open economies are major players in international trade and tend to grow fast. The American economy is an open economy, or an economy in which economic activities occur between the country and the international community. Open economies are major players in international trade and tend to grow faster than economies that do not engage in international trade.

________ is an element of the management activity in a business.

Operations Operations is an element of management. Managers must oversee the firm's operations to ensure that resources are successfully transformed into goods and services.

Which of the following is true regarding an oligopoly?

Prices charged by different firms stay fairly close because a price cut or increase by one company will trigger a similar response from another company. An oligopoly exists when there are very few businesses selling a product. In an oligopoly, individual businesses have control over their products' price because each business supplies a large portion of the products sold in the marketplace. Nonetheless, the prices charged by different firms stay fairly close because a price cut or increase by one company will trigger a similar response from another company.

Which of the following is NOT true of the marketing mix?

Product management involves making sure products are available in the right place at the right time. Marketing focuses on the four P's, also known as the marketing mix. Product management involves product adoption or deletion, branding, and product positioning. Selecting the right price for the product is essential because it relates to profitability. Distribution involves making sure products are available to consumers in the right place at the right time. Marketers use promotion to communicate the benefits and advantages of their products to consumers and increase sales.

Which of the following is true of professional codes of ethics?

They do not have to be too detailed.

Which of the following is true regarding trading companies?

They handle all activities required to move products from one country to another. A trading company buys goods in one country and sells them to buyers in another country. Trading companies handle all activities required to move products from one country to another, including consulting, marketing research, advertising, insurance, product research and design, warehousing, and foreign exchange services to companies interested in selling their products in foreign markets. They are similar to export agents, but their role in international trade is larger.

On which of the following grounds are multinational corporations (MNCs) often criticized by antiglobalization activists?

They misuse and misallocate scarce resources. have been targeted by antiglobalization activists at global business forums, and some protests have turned violent. The activists contend that MNCs increase the gap between rich and poor nations, misuse and misallocate scarce resources, exploit the labor markets in LDCs, and harm their natural environments.

Which of the following is true of misuse of company time?

Time theft costs can be difficult to measure but are estimated to cost companies hundreds of billions of dollars annually. Theft of time is a common area of misconduct observed in the workplace. Time theft costs can be difficult to measure but are estimated to cost companies hundreds of billions of dollars annually. The average employee steals 4.5 hours a week with late arrivals, leaving early, long lunch breaks, inappropriate sick days, excessive socializing, and engaging in personal activities. These activities add up to lost productivity and profits.

U.S. exports to China have been rapidly increasing but not fast enough to offset the imports from China. This means that the United States has

Trade deficit U.S. exports to China have been rapidly increasing but not fast enough to offset the imports from China, meaning that the United States has a trade deficit. A trade deficit is defined as a nation's negative balance of trade, which exists when that country imports more products than it exports.

Janie's boss constantly criticized her work and belittled her. It got so frequent that she began having stomach trouble when she had to go to work. This is an example of a hostile environment.

True

Many citizens called and wrote their congressmen and woman about the health care legislation that was being considered. This relates to the understanding that they had the right to be heard.

True

Plagiarism is considered an ethical issue.

True

Taking credit for others' work or ideas may be considered bullying.

True

The Sarbanes-Oxley Act is an example of how basic ethical and social responsibility concerns have been codified by laws and regulations.

True

A business's obligations to its owners and investors include maintaining proper accounting procedures.

True A business's obligations to its owners and investors, as well as to the financial community at large, include maintaining proper accounting procedures, providing all relevant information to investors about the current and projected performance of the firm, and protecting the owners' rights and investments.

A strategic alliance is a partnership formed to create competitive advantage on a worldwide basis.

True A strategic alliance is a partnership formed to create competitive advantage on a worldwide basis. In some industries, such as automobiles and computers, strategic alliances are becoming the predominant means of competing.

Employees of companies with written codes of ethics are more likely to report misconduct when they see it.

True According to the National Business Ethics Survey (NBES), employees in organizations that have written codes of conduct and ethics training, ethics offices or hotlines, and systems for reporting are more likely to report misconduct when they observe it.

Many U.S. companies have taken advantage of Mexico's low labor costs and proximity to the United States to set up maquiladoras.

True As a result of the North American Free Trade Agreement (NAFTA), many U.S. companies have taken advantage of Mexico's low labor costs and proximity to the United States to set up production facilities, called maquiladoras.

Political unrest in countries often creates a hostile environment for foreign businesses and can act as a barrier to international trade.

True Businesses engaged in international trade must consider the relative stability of countries. Political unrest in countries may create a hostile or even dangerous environment for foreign businesses.

The U.S. had a balanced budget in the 1990s.

True In the 1990s, the U.S. government eliminated its long-standing budget deficit by balancing the money spent for social, defense, and other programs with the amount of money taken in from taxes.

Finance refers to all activities concerned with obtaining money and using it effectively.

True, Finance refers to all activities concerned with obtaining money and using it effectively. Financial resources must be managed effectively if the business aims to succeed.

In a pure competition environment, no business sells enough of the product to influence the price.

True, Pure competition exists when there are many small businesses selling one standardized product, such as agricultural commodities like wheat, corn, and cotton. No one business sells enough of the product to influence the product's price.

When someone receives a patent on a specific product, that person has a monopoly on that product.

True. This monopoly allows the developer to recover research, development, and production expenses and to earn a reasonable profit.

The country of Malyia can produce sugar more efficiently than it can produce other items, giving it ________ advantage.

a comparative This is an example of comparative advantage, which occurs when a country specializes in products that it can supply more efficiently or at a lower cost than it can produce other items.

What type of company benefits the most from licensing?

a large manufacturer that wants to transform a less-known brand into a well-known brand internationally Licensing is especially advantageous for small manufacturers wanting to launch a well-known brand internationally.

In a free-market system,

all economic decisions are made without government intervention. In pure capitalism, also called a free-market system, all economic decisions are made without government intervention.

A mining company in Malyia that possesses the only mine where a specialty ruby can be found has

an absolute advantage.

Which of the following is most likely to cause a trade surplus?

an abundance of natural resources Until about 1970, the United States had a trade surplus due to an abundance of natural resources and the relative efficiency of its manufacturing systems.

If the United States were to devalue its currency, the most likely result would be

an increase in its exports. Devaluation decreases the value of currency in relation to other currencies. Devaluation encourages the sale of domestic goods and tourism, causing an increase in exports.

Healthy Foods, Inc. started using a new experimental sugar substitute in its products. However, it didn't include that this sugar substitute could cause dizziness and nausea anywhere on its packaging. This is a violation of the consumers' right to

be informed. This example violates the consumers' right to be informed. This right means that detailed information about ingredients, risks, and instructions for use are to be printed on labels and packages.

If a country balances the money it spends for social, defense, and other programs with the amount of money it takes in from taxes, this country is eliminating a

budget deficit. If a country balances the money it spends for social, defense, and other programs with the amount of money it takes in from taxes, it is eliminating a budget deficit.

The warning on cigarette packages about the health implications of smoking is an example of which element of fairness and honesty?

communications An important aspect of communications regarding an ethical issue is product labeling such as the Surgeon General's warning on cigarette packages.

In which of the following economic systems do most people work for government-owned industries or farms?

communist In a communist system, people have little choice in choosing a career and most work for government-owned industries or farms.

All of the following are associated with dishonesty EXCEPT

competition. Dishonesty is usually associated with a lack of integrity, lack of disclosure, and lying. Stealing and cheating are other examples of dishonesty.

Lydia, a manager, makes decisions that benefit her financially at the expense of her firm. Which of the following ethical issues in business is addressed in this example?

conflict of interest

Exporting may occur through ________, which involve bartering products for other products rather than currency.

countertrade agreements Exporting sometimes takes place through countertrade agreements, which involve bartering products for other products instead of for currency.

The effective translation of product names can be crucial to success in foreign markets because of

cultural barriers. Cultural differences include differences in spoken and written language. Although it is certainly possible to translate words from one language to another, the true meaning is sometimes misinterpreted or lost.

Increased unemployment can reduce consumer demand for goods and services, leading to

deflation. In an economic contraction, unemployment increases and people spend less money, which can lead to deflation or decrease in market prices.

When UPS invested in a foreign tech startup, Ally Commerce Inc., to give it greater access to online sales, it was exemplifying

direct investment.

Agro Corp., based in the country of Arahonia, is a company that produces agricultural products. The domestic market of Arahonia is not sufficient to support Agro Corp.'s large-scale level of production because Arahonia is a small, but highly industrialized, country. Thus, Agro Corp. decides to sell its products to the agriculture-based country of Petinberg at less than its cost, so it doesn't have to cut production. This process is termed

dumping

A catastrophic flood crippled Malyia's government. In an effort to help local businesses rebuild, the government forced foreign businesses out of the country. This is an example of a(n) ________ barrier to trade.

economic This is an example of a political barrier to trade. Natural disasters can cripple a country's government, making the region unstable. Forcing businesses out of a country altogether is a drastic example of international politics.

Which of the following is associated with a decline in spending?

economic contraction Economic contraction occurs when spending declines. Businesses cut back on production and lay off workers, and the economy as a whole slows down.

A hair dryer manufacturer produced a new model that could dry a person's hair in under five minutes. When customers used this hair dryer and experienced scalp and hand burns, the manufacturer was required to create and enforce detailed plans to prevent future burns. This example relates to

fairness and honesty. This example relates to fairness and honesty. Companies are expected to disclose potential harm caused by product use.

Which of the following is likely to be a reason for some U.S. companies to bring their outsourced production processes back to the United States?

high cost of transporting products to the home country Companies such as General Electric and Caterpillar are bringing outsourced processes back to the United States due to increasing labor costs in places such as China, the expense of shipping products across the ocean, and fears of fraud or intellectual property theft.

In Norway, most citizens are able to afford basic necessities and some degree of comfort. This means Norway has a(n)

high standard of living. The United States, Germany, Australia, and Norway all have a high standard of living, meaning that most of their citizens are able to afford basic necessities and some degree of comfort.

Auto Corp. buys engines from Malyia and resells them in its stores in Thelisia. This is an example of

importing

Offshoring is different from outsourcing because

in offshoring, the company retains control of the process. Offshoring is the relocation of a business process by a company, or a subsidiary, to another country. Offshoring is different than outsourcing: the company retains control of the process because it is not subcontracting to a different company.

Following a bad harvest, the prices of agricultural commodities in a country have increased dramatically, as have the prices of products manufactured from agricultural commodities. Government intervention has failed to arrest the rising prices. Based on this information, the country is undergoing

inflation. Inflation is a condition characterized by a continuing rise in prices. Inflation can be harmful if individuals' incomes do not increase at the same pace as rising prices, thus reducing their buying power.

Thelisia has abundant railroads, highways, ports, airfields, utilities and power plants, schools, hospitals, communication systems, and commercial distribution systems to support its economic activities. This means Thelisia has a strong

infrastructure.

A fixed tariff differs from an ad valorem tariff because an ad valorem tariff

is based on the value of an item. A fixed tariff is a specific amount of money levied on each unit of a product brought into a country, while an ad valorem tariff is based on the value of an item.

All of the following are true of current trends in ethics programs EXCEPT

lack of organizational ethics initiatives do not impact organizational objectives but do impact employee retention. The current trend is to move away from legally based ethical initiatives and toward cultural- or integrity-based initiatives that make ethics a part of core organizational values. Organizations recognize that effective business ethics programs are good for business performance. Firms that develop higher levels of trust function more efficiently and effectively and avoid damaged company reputations and product images. Lack of organizational ethics initiatives and the absence of workplace values such as honesty, trust, and integrity can have a negative impact on organizational objectives and employee retention

Which of the following is a key step in evaluating ethical decisions in business?

learning how to recognize and resolve ethical issues Learning how to recognize and resolve ethical issues is a key step in evaluating ethical decisions in business.

Joe is a consumer who earns less than $50,000 per year. Joe exemplifies the

majority of individual tax returns filed. Consumers like Joe who earn less than $50,000 per year comprise the majority of individual tax returns filed but pay 6.2 percent of total taxes.

Paral has responsibility for the functions of organizing, staffing, planning, and controlling activities in a large company. These functions are most closely associated with

managers. Managers plan, organize, staff, and control the tasks required to carry out the work of the company or nonprofit organization.

Which of the following can be grouped under a single segment among the various elements of business activity?

marketing and consumers Marketing and consumers are in the same segment because the focus of all marketing activities is to satisfy customers. Marketing includes all the activities designed to provide goods and services that satisfy consumers' needs and wants.

When the assembly line was applied to more industries, America entered the

marketing economy. The assembly line was applied to more industries, increasing the variety of goods available to the consumer. Businesses became more concerned with the needs of the consumer and entered the marketing economy.

The American economic system is best described as ________ because the government regulates business to preserve competition and protect consumers and employees.

modified capitalism Because of its use of laws to regulate business and protect consumers, the American economic system can best be described as modified capitalism.

Kevin owns a local farm stand. Although he sells fruit and vegetables, like the grocery store chains in the area, he has some power over the price he charges because he can offer consumers features they want. For instance, his fruit and vegetables are organic and locally grown. This is an example of

monopolistic competition. In monopolistic competition, businesses have some power over the price they charge because they can make consumers aware of product differences through advertising. Consumers value some features more than others and are often willing to pay higher prices for a product with the features they want. For instance, a farm stand that sells organic and locally grown fruit and vegetables may be able to charge more than a grocery chain.

GloboTron is headquartered in Argonia, and it operates over 500 factories around the world. It is one of the world's major producers of home entertainment equipment. GloboTron is an example of a

multinational corporation. This is an example of a multinational corporation. These corporations operate on a worldwide scale.

After a major horse race, it was discovered that the winner had drugged his horse to make it run faster. As a result, the horse's owner, trainer, and jockey were banned from the racing industry. This exemplifies how

negative judgment directly affects an organization's ability to achieve its business goals. This example shows how negative judgment directly affects an organization's ability to achieve its business goals. Whether made in science, politics, sports, or business, most decisions are judged as right or wrong, ethical or unethical.

Kim's company, Globotech, does not have established rules and policies on ethics. It is a small, independent company that depends on its employees to use their own judgment. This structure can lead to

opportunity for misconduct. If a company fails to provide good examples and direction for appropriate conduct, confusion and conflict will develop and result in the opportunity for misconduct.

DMC Inc., headquartered in Malyia, has completely transferred its tax services to Apex Corp in Thelisia because there are many well-educated workers and lower labor costs. This is an example of

outsourcing. The given process is known as outsourcing. Outsourcing is the transfer of manufacturing or other tasks (such as information technology operations) to companies in countries where labor and supplies are less expensive. Many U.S. firms have outsourced tasks to India, Ireland, Mexico, and the Philippines, where there are many well-educated workers and significantly lower labor costs.

Globotech created its own continuing education program that offers eligible employees full tuition to pursue continuing education related to their roles at the company. It also created a scholarship program to help employees send their children to college. These programs exemplify the company's

philanthropic activities. These programs exemplify the company's philanthropic activities. These additional activities may not be required, but they promote human welfare or goodwill.

Rarely, a country will decide to increase the value of its currency in relation to other currencies. This is called

revaluation. Revaluation increases the value of a currency in relation to other currencies, but occurs rarely.

Auto Corp. learned that in order to sell more cars in Thelisia, it needed a bold and strategic advertising plan; while in Malyia, it needed more attentive customer service. These are examples of ________ barriers.

social The given scenario is an example of how Auto Corp. overcame a social barrier. Most businesspeople engaged in international trade underestimate the importance of social and cultural differences; but these differences can derail an important transaction.

A local pet store, Pals with Paws, donates a portion of every sale to pet rescues in its community. This exhibits the company's

social responsibility. Donating a portion of its proceeds to pet rescues in its community shows this company's social responsibility. Businesses should not only make a profit but also consider the social implications of their activities.

Auto Depot is working to find a way to produce the SUVs and trucks its customers want while meeting environmental requirements. This is an effort to please multiple

stakeholders. This is an example of a company that is trying to please multiple stakeholders. New fuel requirements are forcing automakers to invest in smaller, lightweight cars. During times of low fuel prices, consumers tend to prefer bigger SUVs and trucks, putting more of a strain on automakers to meet environmental requirements as well as consumer demands.

More and more companies are moving from the multinational strategy to a global strategy that involves ________ products for the whole world.

standardizing More and more companies are moving from the multinational strategy to a global strategy (globalization), which involves standardizing products (and, as much as possible, their promotion and distribution) for the whole world, as if it were a single entity. Examples of globalized products are American clothing, movies, music, and cosmetics.

An entrepreneur has been primarily associated with the willingness to

take risks. An entrepreneur is an individual who risks his or her wealth, time, and effort to develop for profit an innovative product or way of doing something.

Sue hired an attorney to help her draft a purchase and sale agreement for her new home. The home is an example of a product that is a(n)

tangible item. A home is a tangible product.

The usefulness of the International Monetary Fund (IMF) for developed countries is limited because

these countries use private markets as a major source of capital. The usefulness of the International Monetary Fund (IMF) for developed countries is limited because these countries use private markets as a major source of capital. The global economic crisis created many challenges for the IMF as it was forced to significantly increase its loans to both emerging economies and more developed nations.

Sarah is a manager who supports ethics and compliance at her company by clearly communicating company expectations for ethical behavior to all employees. This exemplifies

tone at the top. This scenario exemplifies "tone at the top," which requires managers to acknowledge their own role in supporting ethics and compliance, create strong relationships with the general counsel and the ethics and compliance department, clearly communicate company expectations for ethical behavior to all employees, educate all managers and supervisors in the business about the company's ethics policies, and train managers and employees on what to do if an ethics crisis occurs.

Because of an unfavorable political situation between the countries, the country of Thelisia has placed a government order to prohibit the trade of private vehicles with the country of Calibria. Thelisia has maintained a(n) ________ with Calibria.

trade embargo An embargo prohibits trade in a particular product. Embargoes are generally directed at specific goods or countries and may be established for political, economic, health, or religious reasons.