Question 1

Russet Inc. ,an American stainless steel manufacturer,sources iron ore from Australia for the manufacture of steel.It saves on raw material costs as iron ore is cheaper in Australia.This scenario best illustrates _____.
A)the globalization of production
B)the economies of scope
C)vertical integration
D)market segmentation

Accepted Answer

The scenario of Russet Inc. sourcing iron ore from Australia for the manufacture of steel indicates the globalization of production. It implies that companies are sourcing inputs from locations where they are cheaper or more readily available, irrespective of the location of the final product's production or consumption.

Question 2

In 1995,the government of Duyat,a country in Asia,began major economic reforms that allowed free trade relations with other countries.Duyat started exporting iron ore and limestone to other countries around the world.Its domestic market strengthened,and it experienced an economic boost.This scenario best exemplifies _____.
A)nationalization
B)subsidization
C)commodification
D)globalization

Accepted Answer

The scenario described exemplifies globalization, as the country of Duyat expanded its economic activity beyond its domestic market and engaged in free trade with other countries around the world. This led to economic growth and strengthening of its domestic market, which are typical outcomes of globalization. Nationalization refers to the government taking control of private industries, whereas subsidization involves government financial support for specific industries. Commodification refers to the process of turning something into a commodity for market exchange, but this concept does not fit the scenario described.

Question 3

Imperial Inc. ,an Irish semiconductor manufacturer,sources germanium,a raw material used in the production of semiconductors,from China.It takes advantage of differences across countries by treating them as business opportunities.This scenario best exemplifies _____.
A)arbitrage
B)privatization
C)franchising
D)licensing

Accepted Answer

This scenario exemplifies arbitrage, which refers to taking advantage of price differences for the same product or service in different markets. In this case, Imperial Inc. sources germanium from China at a lower cost and uses it to produce semiconductors, which they sell at higher prices in other markets.

Question 4

Which of the following is true of globalization of production?
A)It includes obtaining land,labor,and capital locally.
B)It includes the component parts,skill sets,or information required to produce a product or service.
C)It is limited to manufacturing.
D)It helps companies take advantage of national differences in cost and quality.

Accepted Answer

Globalization of production involves sourcing certain aspects of production, such as labor or materials, from different locations around the world in order to take advantage of the cost and quality differences among them. It is not limited to manufacturing, and while obtaining land, labor, and capital locally can be a part of it, it is not the complete definition. Component parts, skill sets, and information are also important aspects of globalization of production, but they are not the central idea.

Question 5

According to author Thomas Friedman,which of the following is true of the flat world?
A)Ten percent of activity is conducted globally,and the remaining ninety percent is conducted domestically.
B)The few cities that dominate international financial markets-Frankfurt,Hong Kong,London,New York,Singapore-represent the peak of global integration.
C)Most of the world's cities are much more connected at the local level than they are to any other domestic city,and more connected domestically than to any foreign city.
D)Individuals in poor countries with limited infrastructure are able to compete with people in rich,well-developed countries.

Accepted Answer

According to Thomas Friedman, the flat world allows individuals in poor countries with limited infrastructure to compete with people in rich, well-developed countries. This is because technology has made it easier for individuals to access information and markets without requiring physical infrastructure. Option A is incorrect as the majority of activity is conducted globally, not domestically. Option B is incorrect as there are many other cities besides those mentioned that are highly connected to the global economy. Option C is incorrect as Friedman argues that the world is becoming increasingly connected at a global level, not just locally or domestically.

Question 6

Which of the following is true of globalization?
A)It makes it difficult to buy and sell internationally.
B)It increases socioeconomic equality in emerging markets.
C)It makes it difficult for employers to move jobs to cheaper locations.
D)It builds on the principle of sovereignty to strengthen the relationships that connect us.

Accepted Answer

The answer of Which of the following is true of...

Question 7

Spain and Italy are both members of the European Union.Nayeli,a Spaniard,is able to purchase Italian-made bags from a handbag store in Spain without paying additional taxes.The market created by the European Union is a(n)_____.
A)monopolistic market
B)oligopolistic market
C)gray market
D)globalized market

Accepted Answer

The scenario described in the question suggests a globalized market, as there are no additional trade barriers or taxes imposed between member countries of the European Union, allowing for the free movement of goods and facilitating a broader market for products from different countries.

Question 8

Dasom Inc. ,a South Korean smartphone manufacturer,sells its smartphones in 64 countries around the world and has offices in 36 counties.Dasom's business expansion best exemplifies _____.
A)globalization
B)nationalization
C)subsidization
D)commodification

Accepted Answer

Dasom Inc.'s business expansion to sell smartphones in 64 countries and have offices in 36 countries demonstrates globalization, which refers to the integration and interdependence of economic, social, cultural, and political systems across different countries and regions.

Question 9

Which of the following is true of arbitrage?
A)It is limited to manufacturing.
B)It involves searching for deals on production factors across geographic boundaries.
C)It treats differences across nations as constraints.
D)It involves obtaining land,labor,and capital from domestic markets.

Accepted Answer

Arbitrage involves searching for deals on production factors, such as labor, capital, and goods, across geographic boundaries, taking advantage of price differences. It does not necessarily involve manufacturing, nor does it treat differences across nations as constraints. Obtaining land, labor, and capital from domestic markets is just one way to engage in arbitrage.

Question 10

The Commerce Coalition (CC)is an intergovernmental organization operating in South Asia that consists of seven member nations.The CC was established to enable free trade across these seven countries of South Asia.A citizen of any of the member nations can easily purchase goods produced in another member nation without paying additional taxes.Given this information,it can be said that the large market created by the CC is an example of a(n)_____.
A)monopolistic market
B)globalized market
C)oligopolistic market
D)gray market

Accepted Answer

The establishment of the CC to enable free trade across seven countries in South Asia has created a large market for goods produced in member nations, which is an example of a globalized market. A globalized market refers to a market that operates on a global scale, with cross-border transactions facilitated by the elimination of trade barriers and the adoption of common economic policies.

Question 11

Steel manufacturers use limestone as one of the raw materials in the production of steel.It can be said that limestone is a(n)_____.
A)industrial product
B)convenience product
C)unsought product
D)specialty product

Accepted Answer

Limestone is used as a raw material in the production of steel, making it an industrial product. It is not a convenience, unsought, or specialty product.

Question 12

Borivia is a country in Eastern Europe that was ruled by Auleria,a country in Western Europe,for over a century.It gained independence from Auleria in 1923.Now,Borivia has its own government.Given this information,it can be said that Borivia is a(n)_____.
A)monopoly
B)monarchy
C)sovereign nation
D)emerging market

Accepted Answer

Borivia is described as having its own government and having gained independence from Auleria, indicating that it is now a sovereign nation.

Question 13

Niall is an assembly-line worker in a car-manufacturing firm in Detroit.Assembly-line workers like Niall constitute the _____ of the car-manufacturing firm.
A)visible artifacts
B)intangible resources
C)factors of production
D)economies of scale

Accepted Answer

Assembly-line workers are considered a factor of production, along with other inputs such as raw materials, machinery, and technology.

Question 14

Which of the following examples best illustrates the globalization of production?
A)Silva Hotels & Resorts,a Brazilian hotel chain,provides hospitality services to tourists from all around the world.
B)Taupe,an Australian non-profit organization,is funded by Australian multinational companies.
C)Hazel Inc. ,an Irish textile company,engages in corporate social responsibility.
D)Tanner Inc. ,an American publishing company,outsources writing services to India.

Accepted Answer

Tanner Inc, an American publishing company outsourcing writing services to India, illustrates the globalization of production as it involves the relocation of a specific stage of production (writing) to a foreign country (India) to take advantage of lower labor costs and increase efficiency, which is a key feature of globalization. The other options, such as Silva Hotels & Resorts providing hospitality to tourists from around the world and Hazel Inc. engaging in corporate social responsibility, do not necessarily involve the relocation of production to foreign locations. Taupe is a nonprofit organization and does not involve production or outsourcing of any kind.

Question 15

Limestone,shells,and chalk are some of the raw materials used in the manufacture of cement.Raw materials like these constitute the _____ of the cement industry.
A)factors of production
B)visible artifacts
C)intangible resources
D)economies of scale

Accepted Answer

Raw materials used in the manufacture of cement are considered factors of production, as they are necessary inputs used in the production process.

Question 16

Nebula Inc.is an American smartphone manufacturer that sells smartphones in 36 countries across the globe.Nebula makes both low-end and high-end smartphones to cater to the needs of different markets across the world.There is a high demand for Nebula's low-end smartphones chiefly in developing nations.Its high-end smartphones have buyers mostly in developed nations.One of the challenges that Nebula faces is planning its sales strategy to suit different markets.Given this information,it can be said that Nebula's smartphones are an example of _____.
A)natural products
B)perishable products
C)consumer products
D)industrial products

Accepted Answer

Nebula's smartphones are consumer products as they are sold directly to individual consumers.

Question 17

Which of the following best illustrates global convergence?
A)Sylvester Inc. ,an American car-manufacturing company,uses the Japanese business philosophy of kaizen.
B)Hexagon Corp. ,a steel company in the United States,has many plants in different parts of the country.
C)Hawke Inc. ,an American computer manufacturer,imports raw materials from Nigeria,and in return it invests in Nigeria's infrastructure development.
D)Micra Inc. ,an Indian mining company,engages in corporate social responsibility by providing training services to local schools.

Accepted Answer

The answer of Which of the following best illustrates global...

Question 18

Desktop computers are used by people all around the world.One of the challenges faced by computer manufacturing companies is to overcome the cultural and economic differences across communities that make it difficult for them to sell their products.Given this information,it can be said that desktop computers are _____.
A)industrial products
B)consumer products
C)natural products
D)perishable products

Accepted Answer

Desktop computers are consumer products as they are used by individuals or households. The challenge faced by manufacturing companies related to overcoming cultural and economic differences further supports the fact that they are consumer products.

Question 19

When the demand for smartphones increased in Preteresia,a country in Eastern Europe,the smartphone manufacturers started importing silicon,a raw material used in the manufacture of smartphones,from Abresia,a country in Africa.In return,Preteresia helped build Abresia's infrastructure to facilitate the efficient extraction of silicon.This scenario best illustrates _____.
A)monopolization
B)centralization
C)market segmentation
D)global convergence

Accepted Answer

This scenario best illustrates global convergence, which refers to the increasing interconnectedness and interdependence of economies and businesses across the globe. In this scenario, two countries are working together to meet each other's needs and are benefiting mutually. Preteresia is importing raw material from Abresia and helping develop its infrastructure, which will further enhance Abresia's silicon extraction capabilities, resulting in increased trade and economic benefits for both countries. This reflects the concept of global convergence, where businesses and economies are increasingly working together, leading to substantial benefits for all.

Question 20

Which of the following is an effect of the Internet on globalization?
A)It triggered billion-dollar investments in fiber-optic telecommunications cables.
B)It led to the demise of traditionally local businesses.
C)It inhibited free trade.
D)It increased the barriers to competition.

Accepted Answer

The Internet has led to the development and deployment of fiber-optic telecommunications cables on a massive scale, allowing for easier and faster communication across national borders. This has facilitated global trade and investment. Choices B, C, and D are incorrect, as the Internet has actually enabled local businesses to expand their reach and compete on a global scale, facilitated free trade, and reduced the barriers to greater competition.

Quiz 1: Globalization

Russet Inc. ,an American stainless steel manufacturer,sources iron ore from Australia for the manufacture of steel.It saves on raw material costs as iron ore is cheaper in Australia.This scenario best illustrates _____.

Imperial Inc. ,an Irish semiconductor manufacturer,sources germanium,a raw material used in the production of semiconductors,from China.It takes advantage of differences across countries by treating them as business opportunities.This scenario best exemplifies _____.

Which of the following is true of globalization of production?

According to author Thomas Friedman,which of the following is true of the flat world?

Which of the following is true of globalization?

Spain and Italy are both members of the European Union.Nayeli,a Spaniard,is able to purchase Italian-made bags from a handbag store in Spain without paying additional taxes.The market created by the European Union is a(n) _____.

Dasom Inc. ,a South Korean smartphone manufacturer,sells its smartphones in 64 countries around the world and has offices in 36 counties.Dasom's business expansion best exemplifies _____.

Which of the following is true of arbitrage?

Steel manufacturers use limestone as one of the raw materials in the production of steel.It can be said that limestone is a(n) _____.

Borivia is a country in Eastern Europe that was ruled by Auleria,a country in Western Europe,for over a century.It gained independence from Auleria in 1923.Now,Borivia has its own government.Given this information,it can be said that Borivia is a(n) _____.

Niall is an assembly-line worker in a car-manufacturing firm in Detroit.Assembly-line workers like Niall constitute the _____ of the car-manufacturing firm.

Which of the following examples best illustrates the globalization of production?

Limestone,shells,and chalk are some of the raw materials used in the manufacture of cement.Raw materials like these constitute the _____ of the cement industry.

Which of the following best illustrates global convergence?

Which of the following is an effect of the Internet on globalization?