International Business Section G1 Test #1

Which is not a factor of production? A) Trade B) Land C) Capital D) Energy

A) Trade

Which of the following is a consequence of globalization? A) Decreasing interdependence between national economies B) Increasing outsourcing of services C) Differentiation of material culture D) Increase in barriers to cross-border trade

B) Increasing outsourcing of services

A capital intensive country exports products that are capital intensive. Which theory is this an example of? A) New trade B) Leontif Paradox C) Porter Diamond Model D) Heckscher-Olin

D) Heckscher-Olin

TRUE OR FALSE Critics of globalization maintain that the apparent decline in real wage rates of unskilled workers owes far more to a technology-induced shift within advanced economies toward jobs that require significant education and skills

FALSE It is due to the migration of low-wage manufacturing jobs offshore and a corresponding reduction in demand for unskilled workers; supporters of globalization maintain that the apparent decline in real wage rates of unskilled workers owes far more to a technology-induced shift within advanced economies away from jobs where the only qualification was a willingness to turn up for work every day and toward jobs that require significant education and skills

TRUE OR FALSE The most rigid system of social stratification is a class system

FALSE The most rigid system of social stratification is a caste system; a class system is a less rigid form of social stratification in which social mobility is possible

TRUE OR FALSE In industries where economies of scale are important, both the variety of goods that a country can produce and the scale of production are limited by the size of the market

TRUE

TRUE OR FALSE In mixed economies, governments also tend to take into state ownership troubled firms whose continued operation is though to be vital to national interests

TRUE

The role of government in a market economy involves A) Encouraging vigorous free and fair competition among private producers B) Mobilizing economic resources of the country for public good C) Determining the prices at which the goods and services will be sold D) Planning the types and quantities of goods and services to be produced

A) Encouraging vigorous free and fair competition among private producers

Which of the following observations is consistent with Michael Porter's theory of national competitive advantage? A) Factors such as domestic demand and domestic rivalry determine nations' dominance on production B) Countries should produce only those goods for which they have a comparative advantage C) Interplay between the factors of production cause international marketing decisions D) International differences in labor productivity determine nations' supremacy in production

A) Factors such as domestic demand and domestic rivalry determine nations' dominance on production

Which of the following is true about planned economies? A) In a planned economy, the state owns all means of production B) In a planned economy, entrepreneurs have economic incentives that encourage innovation C) In a planned economy, market regulations reduce the risk of economic stagnation D) In a planned economy, individuals benefit more from innovations than state does

A) In a planned economy, the state owns all means of production

The group is the primary unit of social organization in A) Japan B) The United States C) Switzerland D) Mexico

A) Japan

The ___________ dimension of Hofstede's study explores how a society deals with the fact that people are unequal in physical and intellectual capabilities A) Power distance B) Individualism vs. collectivism C) Uncertainty avoidance D) Masculinity vs. femininity

A) Power distance

In several Western democracies, the poor performance of state-owned enterprises, because of protection from competition and guaranteed government financial support, led to __________ A) Privatization B) Nationalization C) Liberalization D) Socialization of production

A) Privatization

Hofstede's results, as might be expected, showed that nations such as ____________ scored low on long-term orientation A) The United States and Canada B) China and Sweden C) Japan and Thailand D) Great Britain and India

A) The United States and Canada

A political system that stresses the primacy of collective goals over individual goals is called A) Individualism B) Collectivism C) A democracy D) A market economoy

B) Collectivism

The theory of comparative advantage provides strong rationale for supporting the idea of ______ A) Business nationalism B) Free trade C) Protectionism D) Governmental intervention in trade

B) Free trade

The Research and Development division of a company has recently designed a new coffee vending machine that is likely to sell very well in the market. It is compact, user-friendly, and provides unprecedented efficiency in terms of cost per cup. Consequently, the company fears that its competitors would soon mimic the design of their product, and to protect their product, it is now seeking a _______ for the same A) Copyright B) Patent C) Trademark D) Certification

B) Patent

Which of the following argues that it is in a country's best interests to maintain a trade surplus? A) Theory of national competitive advantage B) Principle of mercantilism C) Principle of absolute advantage D) New trade theory

B) Principle of mercantilism

The emphasis of individualism in the United States results in which of the following advantages? A) Managers tend to develop good general skills as well as company-specific experience B) Teams are built within an organization to perform collective tasks C) Executives are exposed to different ways of doing business D) It is easy to achieve cooperation--both within a company and between companies

C) Executives are exposed to different ways of doing business

Porter's diamond of competitive advantage includes all of the following except A) Factor endowments B) Demand conditions C) First-mover advantages D) Firm strategy, structure, rivalry

C) First-mover advantages

Other things being equal, the benefit-cost-risk trade-off is likely to be most favorable in A) Politically unstable developing nations that operate with a mixed or command economy B) Nations where there is a dramatic upsurge in either inflation rates or private-sector debt C) Politically stable developed and developing nations that have free market systems D) Developing nations where speculative financial bubbles have led to excess borrowing

C) Politically stable developed and developing nations that have free market systems

Which organization is responsible for policing the world trading system? A) The International Monetary Fund B) The United Nations C) The World Trade Organization D) The World Bank

C) The World Trade Organization

Which of the following arise when a company is exporting more goods and services that it is importing? A) Current account surplus B) Trade deficit C) Trade surplus D) Trade balance

C) Trade surplus

Which is not a primary determinant of a nation's rate of economic development? A) Its political system B) Its economic system C) Its geography D) Its currency

D) Its currency

Consider whether the shift toward a more integrate and interdependent global economy is a good thing. Discuss the shift from eyes of the consumer, the worker, the company, and the environmentalist

There are many advantages of globalization. From a broad perspective, globalization creates economic activity (which stimulates economic growth), creates jobs, raises income levels, and provides consumers with more choices in regards to the products and services that are available to them. From the perspective of an individual firm, globalization has the potential to increase revenues (through expanded market potential), drive down costs (through additional economies of scale), and boost profits. However, critics argue that globalization destroys manufacturing jobs in wealthy countries and contributes to pollution. Critics argue that falling trade barriers allow firms in industrialized countries to move their manufacturing activities offshore to countries where wage rates are much lower. Critics also argue that globalization encourages firms from advanced nations to move to manufacturing facilities offshore to less developed countries to avoid the more stringent pollution controls in place in their home countries