Deck 11: Creating Products and Pricing Strategies to Meet Customers Needs

Question 1

Absolute advantage occurs when a country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries.

Answer 1

True

Question 2

Free trade is the movement of goods and services among nations without political or economic trade barriers.

Answer 2

True

Question 3

Global trade is the exchange of goods and services across national borders.

Answer 3

True

Question 4

Every country has a comparative advantage in something.

Question 5

A trade surplus occurs when the value of the country's exports exceeds that of its imports.

Question 6

Economics tells us that it is a poor idea to trade globally.

Question 7

Importing is buying products from another country.

Question 8

Comparative advantage theory states that some countries have a monopoly on producing a specific product.

Question 9

A trade deficit occurs when the value of the country's imports exceeds that of its exports.

Question 10

Global trade only includes the trade of manufactured goods.

Question 11

Comparative advantage theory states that a country should sell to other countries those products that it produces most effectively and efficiently.

Question 12

One advantage of engaging in business globally is the businesses have entirely new markets in which to sell their products.

Question 13

Exporting is buying products from another country.

Question 14

One disadvantage of global business is that labor is more expensive overseas.

Question 15

Global business is the study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals.

Question 16

The balance of trade is a nation's ratio of imports to exports.

Question 17

Many Middle Eastern countries have a comparative advantage in the production of oil.

Question 18

Global business is any activity that seeks to provide goods and services to others across national borders while operating at a profit.

Question 19

Global business is not particularly competitive because the market is so big.

Question 20

The global market is smaller than the American market.

Question 21

The U.S.published the Harmonized Tariff Schedule,which includes tariff costs for every product from every country.

Question 22

The WTO is an organization that mediates trade disputes between countries and also sets policies in place to encourage trade.

Question 23

The goal of effective global trade is to have more money flowing into the country than flowing out of the country.

Question 24

Keiretsu are "corporate families" in Japan.

Question 25

A common market is also called a trading bloc.

Question 26

Dumping is the practice of selling products in a foreign country at lower prices than those charged in the producing country.

Question 27

The gray market refers to the flow of goods in a distribution channel or channels other than those intended by the manufacturer.

Question 28

Every year since 1976 the U.S.has had a favorable balance of trade.

Question 29

The gray market refers to exports targeted to senior citizens.

Question 30

In 2007 the top trading partner of the U.S.was China.

Question 31

The balance of payments is the difference between money leaving the country and money coming into a country.

Question 32

A common market is a regional group of countries that have a common external tariff,no internal tariffs and the coordination of laws to facilitate exchange among member countries.

Question 33

Nontariff barriers are restrictive standards that detail exactly how a product must be sold in a country.

Question 34

Trade protectionism is the use of government regulations to expand the import of goods and services.

Question 35

The U.S.is the world's largest exporting nation.

Question 36

A tariff is a tax on imported goods.

Question 37

An embargo is a moderate slowing of the import or export of a certain products with a particular country.

Question 38

GATT is an agreement signed by many countries to reduce the restrictions on trade with one another.

Question 39

Retail tariffs are designed to raise the retail price of imported products so that domestic goods will be more competitively priced.

Question 40

Revenue tariffs are designed to raise money for the government.

Question 41

The Uruguay Round established the World Trade Organization.

Question 42

A franchising agreement is an arrangement whereby someone with a good idea for a business sells to others the rights to use the business name and sell the product or service in a given territory.

Question 43

One benefit of a joint venture is that the firms involved can share technology.

Question 44

Licensing refers to selling the right to manufacture a product or use a trademark to a foreign company for a fee.

Question 45

A joint venture is a long-term partnership between two or more companies established to help each company build competitive market advantages.

Question 46

Contract manufacturing involves a foreign company's production of private label goods to which a domestic company then attaches its own brand name or trademark.

Question 47

NAFTA is an agreement signed by the U.S.,Canada and Brazil to reduce or eliminate tariffs on goods and to encourage trade between the countries.

Question 48

Opponents of the ratification of NAFTA included organized labor unions.

Question 49

OPEC is an organization consisting of 12 oil-producing countries,working collectively for oil interests.

Question 50

A keiretsu is a type of non-tariff barrier.

Question 51

The EU began as an alliance of six trading partners in the late 1950s and by 2007 had grown to a group of 27 countries,with several more poised to join.

Question 52

GATT established an international forum for negotiating mutual reductions in trade restrictions.

Question 53

The strategy for reaching global markets with the least amount of risk is contract manufacturing.

Question 54

Part of the mission of OPEC is to seek ways and means of ensuring the stabilization of prices in international oil markets.

Question 55

A person who buys a franchise is called a franchisor.

Question 56

One objective of NAFTA is to promote conditions of fair competition between Canada,the U.S.and Mexico.

Question 57

Denmark requires companies to sell butter in cubes,not tubs.This type of policy is called an embargo.

Question 58

The goal of a quota is to prevent other countries from flooding the market with products,thereby driving down the price.

Question 59

The licensing fee is called a royalty.

Question 60

Mercosur is an example of a common market.

Question 61

Ethnocentricity is an attitude that one's own culture is superior to all others.

Question 62

Foreign direct investment is the buying of permanent property and businesses in foreign nations.

Question 63

A multi-national corporation is an organization that markets products worldwide,but manufactures these products in the home country.

Question 64

When a host government takes over a foreign subsidiary in a country it is called expropriation.

Question 65

A strategic alliance is a long-term partnership between two or more companies established to help each company build competitive market advantages.

Question 66

Culture refers to the set of values,beliefs,rules and institutions held to by a specific group of people.

Question 67

Licensing can work well for small companies that have come up with a new product.

Question 68

The exchange rate is the value of one nation's currency relative to the currencies of other countries.

Question 69

A Redfield investment means that a company will enter into a country and build factories and offices on its own.

Question 70

One disadvantage of contract manufacturing is that intellectual property and copyright laws are different in every country.

Question 71

Creating a foreign subsidiary is an especially good strategy for smaller firms that want to enter the global marketplace.

Question 72

One advantage of franchising is that the product or service is made and sold in exactly the same way throughout the world.

Question 73

Franchising differs from licensing in that where franchising is for a single product,licensing allows the use of an entire concept including the label,how the good is manufactured or made and the look and feel of the business.

Question 74

Over 95 percent of the exporters in the U.S.are very large businesses.

Question 75

The difference between a joint venture and a strategic alliance is that typically a joint venture does not involve sharing costs,risks,management or even profits.

Question 76

A foreign subsidiary is a company that is owned in the home country by a foreign company.

Question 77

Companies that engage in partnerships (such as joint ventures)grow more slowly than their counterpart companies that do not.

Question 78

To be successful,the firms entering a strategic alliance need to be roughly the same size.

Question 79

Global marketing is the term used to describe selling the same product in different ways in the world,depending on the culture and customs of the country.

Question 80

Joint ventures can be mandated by governments as a condition of doing business in their country.