Intro to Business Chapters 1-3

Which of the following statements about strategic alliances is true?

A strategic alliance is sometimes called a strategic partnership.

Which of the following statements about the interaction of demand and supply is true?

At prices below equilibrium, demand exceeds supply.

Which of the following is NOT listed in the text as a reason why more and more companies are doing business in the global marketplace?

Companies enter the global marketplace to maintain their balance of trade.

_____ inflation is triggered by increases in production costs which increase the costs of final goods and services.

Cost-push

_____ contributes to an employee's self-worth, which, in turn increases productivity and reduces absenteeism.

Empowerment

_____ is the concern of businesses for the welfare of society as a whole.

Social responsibility

_____ are all the individuals or groups to whom a business has a responsibility.

Stakeholders

A(n) _____ is a tax levied by a nation on imported goods.

Subsidy

Besides tariffs, a government can use a number of other tools to restrict trade. Which of the following is NOT a tool aimed at restricting trade?

Subsidy

Amgen, the largest biotechnology company in the world, donates millions of dollars annually to raise the value of science literacy in the community and attract bright young minds into the field of science. Since Amgen, as an employer would benefit from this philanthropy, it would be characterized as strategic giving. t/f

True

Businesses engage in environmental protection activities to show their responsibility to their general public stakeholders. t/f

True

In international licensing, the licensor is the domestic firm that allows the licensee to use its trademark or brand.t/f

True

Limitations on the quantity of certain types of goods that can be imported over a period of time are called import quotas.t/f

True

One of the advantages multinational corporations have over other companies is their ability to sidestep regulatory difficulties.t/f

True

Organizations can be evaluated on two basic dimensions with regard to social responsibility--legality and responsibility. t/f

True

Some multinational corporations are so large that they resemble small countries.t/f

True

The International Monetary Fund (IMF) was created to promote trade through financial cooperation by working to eliminate trade barriers.t/f

True

The need for businesses to expand their markets is one of the most fundamental reasons for the growth in world trade.t/f

True

The opposite of free trade is protectionism. t/f

True

The signing of the Central America Free Trade Agreement by the United States will more than likely not result in a major increase of U.S. exports.t/f

True

_____ is a philosophy that focuses on the consequences of an action to determine whether it is right or wrong. This philosophy holds that an action that affects the majority adversely is morally wrong.

Utilitarianism

The karakul is a breed of Central Asian sheep that produces curly, glossy wool. This wool is popular in some countries for the manufacturing of warm hats and coats. Since the breed can only be grown in Central Asia, this region can be said to have a(n):

absolute advantage

A key element in capitalism is:

individual ownership of property

Jamaica has 35 airports, 18,700 kilometers of paved and unpaved road and a total of 272 kilometers of railroad track. This is a partial description of the nation's:

infrastructure

Today companies are focusing on _____, which involves building, maintaining, and enhancing interactions with customers and other parties so as to develop long-term satisfaction through mutually beneficial partnerships.

relationship management

Another factor influencing business ethics is _____, or what is fair according to prevailing standards of society.

justice

Which of the following is probably the MOST difficult environmental factor for owners and managers to forecast, influence, or integrate into business plans?

social change

The national debt is the:

cumulative total of past national deficits

When the economy is in a recession, many companies must lay off workers, which causes _____ unemployment.

cyclical

Summer Dean was walking through the mall and found a gym bag lying on the ground. The decision Dean must make as to whether to keep the gym bag and its contents for herself or turn it into the mall's lost and found department involves:

ethics

U.S. plane manufacturer McDonnell-Douglas has authorized Mitsubishi Heavy Industries, a Japanese company, to use its trademarks, patents, and other proprietary knowledge to manufacture F-15 fighter planes. Mitsubishi Heavy Industries pays McDonnell-Douglas. This is an example of:

licensing

Avery Lutz quit his landscaping job in Florida and has moved to British Colombia, where he is actively seeking employment in the real estate industry. This is an example of _____ unemployment.

frictional

The World Trade Organization (WTO):

has emerged as the world's most powerful institution for reducing trade barriers and opening markets

One of the keys to ethical business behavior is:

how the company's top management conducts themselves

In a mixed economy, the government is involved in the economic system through:

taxing, spending, and welfare activities

Market equilibrium is:

the point at which quantity supplied equals quantity demanded

Social responsibility goes beyond obligations provided by law or union contract. Two important aspects of social responsibility are that the obligation is both:

voluntary and broad

The Uruguay Round of trade negotiations:

was the most ambitious global trade agreement ever negotiated

Strategic giving:

refers to the practice of tying philanthropy closely to the corporation's mission or goals

An economic system based on complete freedom of trade and little, if any, government control is known as:

capitalism

The philosophy of utilitarianism is used to explain why restaurants, theaters, and hotels should make themselves handicapped accessible. t/f

False

To be a useful code of ethics, the code should offer broad policies and procedures rather than detailed rules. t/f

False

When sales of cheese in the United States began to stagnate, the U.S. dairy industry looked for a quick and easy method to reach global markets. From your understanding of how companies participate in the global marketplace, you should know that the dairy industry selected:

Exporting

A countertrade in international terms pertains to the sale of retail goods that are usually sold "over the counter."t/f

False

A well-designed product transcends cultural barriers. It does not need to be changed to suit different countries or cultures.t/f

False

According to the principle of absolute advantage, each country should specialize in the products that it can produce most readily and cheaply and trade those products for products that foreign countries can produce most readily and cheaply. t/f

False

Enlightened firms are realizing that empowerment puts too much stress on employees and are eliminating empowerment programs. t/f

False

Expropriation is a political risk in which a country seizes the assets of a foreign firm and does not compensate the firm.t/f

False

Having a global vision simply means having a willingness to sell outside one's national borders if, and when, the opportunity arises. t/f

False

If Syria gives Lebanon a tariff advantage over other countries, Lebanon has been given a biased tariff.t/f

False

The Uruguay Round of trade negotiation is an agreement that only affects trade among Latin American countries.t/f

False

A policy of permitting the people of a country to buy and sell where they please, without restrictions, is called:

Free Trade

Nations sometimes form free-trade associations and establish areas where there are few, if any, export and import duties or other regulations that would act as barriers to trade among partners. These are called:

Free trade zones

_____ refers to a government's programs for controlling the amount of money in circulation.

Monetary policy

_____ move resources, goods, services, and skills across national boundaries without regard to the country in which they are headquartered.

Multinational corporations

Which of the following statements about human rights is true?

None of the above statements about individual rights is true.

The _____ created the world's largest free-trade zone.

North American Free Trade Agreement

How has terrorism affected global trade?

Terrorism has curtailed the liberal inflows of skilled and blue-collar workers.

Which of the following statements about dumping is true?

The U.S has passed laws to make dumping illegal.

In 1993, Purdue Pharmaceuticals of Stamford, Conn. applied for the first in a series of patents on Oxycontin, a painkiller. The U.S. Patent and Trademark Office (PTO) granted those patents based on the manufacturer's contention that the drug contained a novel innovation: It had been engineered so that only a very small dose was required for the drug to be effective for 90 percent of patients. Seven years later, a generic drug maker, Endo Pharmaceuticals, applied to the FDA for permission to sell its own, lower-priced version of Oxycontin. Purdue's patents acted as a(n) _____ and prevented Endo from entering the market.

barrier to entry

An economic system based on competition in the marketplace and private ownership of the factors of production is known as:

capitalism

Canada is currently the second largest producer of nickel in the world. The reopening of the world famous Voisey's Bay mine, which has total resources estimated at 124 million tons of nickel-bearing ore, should give Canada a clear:

comparative advantage

The Sara Lee Company sells the Hanes brand of hosiery in the United States. The manufacturer of this hosiery brand in Great Britain sells it under the brand name of Pretty Polly. The Sara Lee Company is using _____ to broaden its global marketing base without investing in overseas plants and equipment.

contract manufacturing

It has been alleged that a Coca-Cola water bottling plant in India has caused illegal water shortages in fifty villages that surround the bottler. If this accusation is true, than Coke was operating at which stage of the social responsibility pyramid?

economic

At the base of the corporate social responsibility pyramid is:

economic responsibilities

There are a large number of small firms that provide entertainment for children's birthday parties. There is little difference between one company's inflatable slide and another company's. Clowns and magicians do similar tricks. Both the sellers and the parents buying the entertainment are well informed as to price and sources although sometimes it is difficult to hire the same entertainer two years in a row because the business is so easy to open and close. What type of market structure do local party entertainers depict?

perfect competition

The European Union (EU) bans the importation of hormone-fed U.S. beef and bioengineered corn and soybeans on safety grounds although Americans eat this food every day. This ban is so consumers in the EU will buy domestic beef and products made from domestically produced corn and soybeans. This ban is an example of:

protectionism