Quiz 5

Which of the following is NOT a limitation of the absolute and comparative advantage​ theories?

​Large-scale production provides economies of scale

According to the eclectic​ paradigm, a factor in deciding whether a firm will internationalize via FDI is the​ _________.

presence of​ location-specific advantages

Established in​ 2010, Instagram quickly found an international market for its​ photo- site.​ Currently, only a small fraction of​ Instagram's customers are from the United States. Instagram is an example of​ a(n) ________.

Born Global Firm

Which statement best describes network theory?

Buyers and sellers are linked to one another through continuous exchanges.

What is a common feature of national industrial​ policies?

Offering tax incentives

What is the second stage of the internationalization process​ model?

Pre-Export

Networks serve as​ positive, long-term​ ________ that businesses form with each other for economic benefit

Relationships

Your company is entering a market that has several small clusters of​ well-established companies. Which of the following is true of an industrial​ cluster?

Companies in industrial clusters have advantages in information and knowledge exchange

How can monopolistic advantage theory explain how certain companies can succeed internationally without much​ competition?

Companies succeed overseas if they have developed resources and capabilities that no other company has.

Vix is a leader in​ fare-collection equipment for​ Australia's transportation​ industry, having already installed a​ new, pioneering system in subways and buses in major cities worldwide. In this​ example, Vix has gained a competitive advantage by​ ________.

Encouraging innovation

​Germany's abundance of employees with strong engineering skills has led to the nation becoming a leader in the international engineering and design industries. This is an example of national competitiveness due to​ ________.

Factor Conditions

What is the most complex entry strategy for engaging in global​ business?

Foreign Direct Investment

SkiJet USA wants to take its production operations overseas. Which of the following is the LEAST likely reason for SkiJet USA to collaborate with overseas​ companies?

Foreign partners would give SkiJet USA complete control over production and marketing.

The factor proportions theory rests on the premise that​ ________

products differ in amount of​ labor, natural​ resources, and capital required for production

You work for an electronics firm that wishes to do business in India in the next few years by following the internationalization process model. Why is this model a viable option for getting into a global​ market?

Starting slow with smaller operations will allow the company to tread cautiously while monitoring progress in the new markets.

The technology for television sets was invented in the United​ States, and production began in the 1940s. Sales grew until TVs became standardized. Then production shifted​ overseas, and now the United States imports its television sets. This is an example of​ ________.

The international product life cycle

The most likely reason that companies engage in international business is to have​ ________

a competitive advantage in terms of lowering costs

Which of the following defines the comparative advantage​ principle?

. It may be beneficial for two countries to trade with each other as long as one is relatively more efficient at producing a product needed by the other.

What is the eclectic​ paradigm?

A framework that explains the extent of value chain operations that firms should own overseas

The New Zealand government enacted​ pro-trade policies in conjunction with the private sector. The government transformed New Zealand into an​ industrialized, competitive, and​ free-market economy. This is an example of​ ________.

A national industrial policy

An advantage of internalization is the ability to​ ________.

Control how a company products are produced

The main reason that firms internalize​ value-chain activities is to​ ________.

Gain and sustain competitive advantage

Both Sony and Toshiba are Japanese companies that produce computers and video games. Which of the following could be a reason that these firms have increased their competitive​ advantage?

Intense Rivalry

Which of the following best explains the slow nature of​ internationalization?

Managers have little or no information about foreign markets

______ favors trade achieved by maximizing exports and minimizing or even impeding imports.

Mercantilism