Quiz 2

Clarence Danvers is buying Cinnabon franchise at the airport in Tulsa. Danvers knows that he will get all of the following benefits except:

Assistance in personal income tax preparation

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 Industries pays McDonnell-Douglas. This is an example of

Contract Manufactring

A corporation:

Does not have a size limitation

Who owns a corporation?

Everyone who owns a share of stock in the corporation

If a country specializes in goods that can produce most readily and cheaply and trades those goods for goods that another country can produce most readily and cheaply, then both countries are exercising the principle of

comparative advantage

A person who buys a franchise has the same level of control as an entrepreneur who opens his or her own sole proprietorship

False

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

False

How does the current boom in mergers and acquisitions differ from ones in earlier years?

There is a greater number of U.S. and foreign companies making cross-border acquisitions

Baby boomers are having a strong effect on the franchise industry

True

Mines in Columbia produce emeralds and sell them to jewelers in the United States. To Columbia miners, emeralds are an export.

True

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

True

The growing popularity of bread machines has become a new business opportunity for Shelly Clemins and Jan Schoenbarr. The women make and sell bread machine covers and fabric gift bags to hold bread loaves made in the machines. the women share the responsibilities of running the business (called bread and Butter) as well as its profits equally. Bread and Butter would be an example of a(n):

general partnership

If the sole proprietorship acquires a legal business name, the owner then has limited liability

false

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

true

Singapore has granted a(n) ________ on the importation of beer and stout made in the Philippines. this means that beer and stout made in the Philippines can sell for less in Singapore than beer and stout made by New Zealand or the United States

preferential tariff

Cooperatives are regulated with the same tax laws and rates as corporations

False

Otters Flavors, Philadelphia, announced its combination with MK Flavors and Co., Mexico City. The Mexican operation will offer U.S.-based company an increased market presence in Central and South America. The new company will be renamed MK Ottens Flavors MK Ottens Flavor was created through a(n):

Merger

The ford Motor Company has investing $6 billion to build a "world car," the midsize Mondeo. The car was designed in the U.S., Germany, and the United Kingdom to be adaptable to any market in the world. Ford is a(n) ______ company

Multinational

Which of the following statements about dumping is true

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

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

True