IB 300 Midterm Study Questions

False

A government nationalizes a firm when it shifts the ownership from public to private.

B

A major portion of the exports from developing countries go to ________ countries, and this proportion has been ________. A. Developed; increasing B. Developed; decreasing C. Developing; increasing D. Developing; decreasing

D

A market situation in which there is a sufficiently large number of well-informed buyers and sellers of a homogeneous product such that no individual participant has enough power to determine the price of the product, resulting in a marketplace that is efficient in production and allocation of products is known as A. Trade Deficit B. Absolute Advantage C. Mercantilism D. Perfect Competition

C

A nation that is struggling to remain competitive in the world market may decide to reduce the value of the country's currency relative to other currencies. This process is called currency A. Customization B. Deficit C. Devaluation D. Surplus

True

According to the theory of comparative advantage, international trade can still be a positive-sum game that benefits both countries having an absolute advantage over one another.

B

Among the cybercrimes that most often target businesses are A. Accessing unauthorized accounts B. Hacking and data espionage C. Check kitting D. Prospecting and phishing

C

An argument against using sanctions to punish an offending nation is that A. Sanctions decrease the cost of doing business B. Sanctions are not condoned by the U.N. C. Sanction seldom achieve their goal of forcing change in the offending country D. Sanctions are relatively harmful to the citizens of the offending company

A

An international manager has three choices when deciding how to employ a technique used in domestic operations to an international operation: transfer it intact, not use it, or A. Adapt it to local conditions B. Provide it to the competition C. Produce it in mass quantities D. Adapt it to customization

A

Environment as used in the textbook involves the forces surrounding and influencing the life and development of the firm and is classified as A. Controllable and Uncontrollable B. Primary and Secondary C. Domestic and Foreign D. Representative and Democratic

C

Examples of expropriation without compensation involve the following governments A. The United Kingdom with the Falklands B. Canada with northern Maine C. the United States confiscated Iranian property in the United States and Cuba confiscated property during the Cuban revolution of the 1950s, and Zimbabwe confiscated land owned by white Zimbabwean citizens. D. China with Hong Kong and Japan with the Kuril Islands

B

Foreign environmental forces often operate differently than domestic environmental forces because A. They typically carry the same value as domestic fores B. The forces are interrelated C. The two forces do not affect each other D. They are easier to assess than domestic forces

C

Governments provide stability by A. Fostering competition and enforcing nontariff barriers B. Supporting imports C. Protecting business from unfair competition and from attacks and theft D. Pursuing open market values

A

Hamlin Millworks is frustrated with the lobbyists who are currently trying to influence Congress to raise taxes for all corporations in the wood products industry. In the environment of Hamlin Millworks, these lobbyists are an example of A. Uncontrollable Forces B. Controllable Forces C. A Domestic Environment D. A Foreign Environment

A

Harrison Manufacturing, based in Toledo, recently purchased a new manufacturing facility and production equipment in Germany that it will use to produce component parts. This purchase is an example of A. Foreign Direct Investment (FDI) B. Economies of Scale C. Importing and Exporting D. Intrastate Commerece

A

Honest Yogurt Company of Denver, Colorado, was relieved when trade barriers on dairy products were lifted in Europe and the company could sell its products there. Which type of driver was affecting the company's ability to do business in Europe? A. Political B. Social C. Technological D. Market

True

International business differs from domestic business in that a firm operating across borders must deal with the forces of three kinds of environments—domestic, foreign, and international.

C

International business really began A. When Colt Fire Arms set up a plant in England B. With the East India Company chartered in 1600 C. When Phoenician and Greek merchants sent representatives abroad to sell goods D. When Singer Sewing Machine put up a factory in Scotland in 1868

C

Rapid urbanization of populations combined with industrialization in the emerging markets is quickly shifting the world's economic center of gravity from A. The US to South America B. China to India C. The Americas and Europe to Asia D. Europe and Asia to Africa

D

Since 1983, the proportion of world trade coming from the United States has A. Not changed B. Increased by 20 percent C. Tripled D. Decreased overall

D

Some countries impose both an ad valorem duty and a specific duty on a single import. What type of duty are these countries using? A. Duplex B. Elite C. Secondary D. Compound

A

Some nontariff barriers are difficult to discourage because A. They consist of government subsidies and standards B. They build on nationalism and patriotism C. They are established by consumers D. Their development has been supported by local politicians

A

Tariffs often are set to A. Encourage local input B. Decrease the import costs C. Decrease consumer costs D. Stimulate imports

D

The 17th and 18th centuries have frequently been termed the "Age of Mercantilism" because A. The Americas were discovered B. The merchant class was created during this time C. Individual states were able to support themselves as more merchants were established D. National power depended on the sponsorship and control of merchant capital

False

The dynamic capability theory states that for a firm to invest overseas, it must have three kinds of advantages: ownership specific, internalization, and location specific.

A

The rise of the Ottoman Empire before 1300 influenced trade as it A. Promoted a search for sea routes from Europe to Asia B. Reduced the cost of European trade for Asians C. Reduced the cost of Asian trade for Europeans D. Eliminated trade between Europe and Asia

D

The three largest markets for American exports of goods in 2017 were A. Canada, Japan, and the United Kingdom B. Japan, the United Kingdom, and China C. Japan Mexico, and the United Kingdom D. Canada, Mexico, and China

True

Unfair international competition for a company can be minimized through the enaction of national laws.

A

Unlike quotas, voluntary export restraints (VERs) are imposed by A. The exporting country's government B. The importing company C. Either the importing or exporting country's government D. The importing country's government

C

What is one of the reasons suggested by Alfred Marshall for why firms tend to cluster together on a geographic basis? A. Production costs decline as facilities get larger. B. Efficiency improves as the result of cumulative experience. C. Technological information can be readily shared. D. Competition will not enter the market.

D

What is the role of the home country in risk assessment? A. It has no role. What matters is the country in which the business is conducted B. Country risk does not involve political considerations at all. C. It is used initially, but then more micro issues become the focus of CRA. D. It is a significant consideration

True

When a manager unconsciously imparts his or her own cultural values on a situation without taking into account the possibility that the culture might vary in a foreign environment, that manager is exhibiting a self-reference criterion.

True

When people are kidnapped for ransom, all governments agree that the right response is to pay the ransom, get the hostages released, and then retaliate.

B

When the value of imports into a nation exceeds the value of its exports, that nation is experiencing a(n) A. Competitive Advantage B. Trade Deficit C. Economy of Scale D. Fixed Market

B

Which country currently exports the most to the United States? A. Canada B. China C. India D. Mexico

A

Which of the elements in Porter's diamond model of national advantage takes into consideration the sophistication of a company's customers? A. Demand Conditions B. Factor Conditions C. Export Conditions D. Government

B

Which statement describes economies of scale? A. They refer to the rising scale on which efficiency improves as a result of cumulative experience and learning. B. They are the predictable decline in the average cost of producing each unit of output as a production facility gets larger and output increases. C. They occur due to the presence of abundance resource endowments within a nation. D. They are only relevant to manufacturing industries

D

___________________ was the world's leading manufacturing country for about 1,800 years, until it was replaced by Britain in about 1840. A. India B. Germany C. Persia D. China

A

A business would obtain KRE insurance to cover losses associated with A. Kidnapping situations associated with a foreign involvement B. Unpredictable international real estate investments C. Higher tariffs when exporting to developing countries. D. Manufacturing operations that do not meet host country standards.

A

Kendall was recently assigned to a management role in his company's overseas operation. He has been taken off guard several times when his employees responded negatively because they said he didn't take their culture into consideration when he made decisions. His employees are referring to a A. Self-reference Criterion B. Production Orientation C. Self-fulfilling Prophecy D. Marketing Orientation

A

Mercantilists believed that A. A nation should have an export surplus in order to accumulate precious metals B. A nation should produce goods for which there is a comparative advantage C. Governments should lower import duties D. Merchants should import goods to raise the level of living

A

Mexico and Canada are major U.S. trading partners because they have the benefit of lower freight charges and shorter delivery times. Why do these benefits exist for these two nations? A. They share a border with the United States B. They established these parameters in the NAFTA agreement C. They source production materials from China D. They have established economies of scale for goods and services

A

One of the problems associated with the "cheap foreign labor" argument for restricting trade is that A. Wages don't account for all the production costs B. The national defense must be kept at maximum levels C. Foreign competition will achieve an unfair advantage D. Inflicting Economic damage might have reverse affects

True

Policy continuity and government stability are more important to a business than the type of political system.

D

The trend toward unification and socialization of the global community is illustrated by which of the following? A. Progressive increases in barriers to foreign investment by most governments B. Expanded barriers to trade by most governments C. Increased public ownership of much of the industry in formerly communist countries D. Preferential trading arrangements that several nations into a single market