Quiz 1

What is the shift toward a more integrated and interdependent world economy called?

Globalization

NAFTA was formed in 1994 between:

. Canada, Mexico, and the United States

Which of the following statements is true about import quotas?

. Import quotas benefit domestic producers limiting import competition

The opening case in Chapter 6 describes the Trans Pacific Partnership; a free trade deal between 12 countries, including the U.S. The goal of this deal is to:

A Reduce tariffs, taxes, and quotas b. Expand market access c. Lower prices for consumers

The rise of Uber discussed in the opening case of Chapter 1 is an illustration of the trend toward globalization. However, Uber has been struggling internationally because:

A. It has not adapted to local cultures and customers b.It did not consider the local regulatory factors

Which provisions of the Foreign Corrupt Practices Act did Walmart violate in the 2012 case involving its operations in Mexico:

A. It is illegal to bribe a foreign government official in order to obtain or maintain business over which the foreign official has authority b. All publicly traded companies must keep detailed records so that it is clear whether a violation of the act has occured

Countries produce a product when it is more efficient than any other country at producing it describes:

Absolute advantage

The legal system based on tradition, precedent, and custom is the:

Common law

What is NOT a true statement about corruption?

Corruption supports countries' international trade and economic growth

Who benefits the most from the imposition of import tariffs?

Domestic Partners

The opening case in Chapter 7 discussed how the overproduction of steel in China led to exporting mass amounts of steel into the world market. Which International Trade concept does this case describe:

Dumping

Which below best illustrates the situation in which a government does not influence through trade barriers what its citizens can buy from another country, or what they can produce and sell to another country?

Free Trade

Which of the following refers to the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors such as labor, energy, land, and capital?

Globalization of production

According to the main tenets of Mercantilism, which below is in a country's best interest?

Maintain a trade surplus

Most Nations in the world have

Mixed economies

Trade produces net gains for all involved and hence is a

Positive sum game

Intellectual property does not include

Property Rights

Which of the following is the most common political argument for government intervention in international trade?

Protecting jobs and industries from unfair foreign competition

Todays global economy is characterized by

Rapid rise in the share of world output by developing nations such as China and India

While the lowering of trade barriers made globalization of markets and production a theoretical possibility, which of the following has made it a tangible reality?

The advances in communication, information processing, and transportation technologies

Why would a company want to heavily invest to obtain a first-mover advantage

a. Build demand b. Build brand c. Build economies of scale All the above

When Starbucks entered the Chinese market, they sued a "look alike" brand that closely matched the Starbucks branding format. Starbucks won this case because it was a ________ violation.

Trademark

According to Adam Smith, countries should specialize in the production of goods for which they have an absolute advantage and then trade these for goods produced by other countries.

True

The economy of Vietnam has transitioned into a market-based system, allowing the economy to experience rapid growth. However even with this transition, the Communist Party still maintains tight control which can make doing business in Vietnam challenging and less attractive.

True

Boeing follows an outsourcing production policy by making parts all over the world. They chose this global production system for which of the following reasons:

a. To disperse production to those who are "best in the world" at their particular activity b. To unburden itself from the costs and risks of developing a production facility c. 80% of their customers are foreign airlines, and to sell in those nations, it helps to give business to those nations