Question 1

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 describes Duyat opening its economy to international trade, which is a hallmark of globalization. Globalization involves the integration of economies through trade, investment, and the exchange of technology and culture.

Question 2

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, having its own government and independence from Auleria, qualifies it as a sovereign nation, meaning it has full right and power to govern itself without any interference from outside sources or bodies.

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

Arbitrage involves taking advantage of price differences in different markets for the same asset. In this case, Imperial Inc. is leveraging the differences in raw material costs (germanium) across countries (Ireland and China) to benefit its semiconductor manufacturing business, which aligns with the concept of arbitrage.

Question 4

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 designed for the end consumer's use, making them consumer products. They are not natural, perishable, or specifically made for industrial use.

Question 5

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 illustrates global convergence, where countries collaborate and integrate their economies through trade and mutual benefits, such as Preteresia importing silicon from Abresia and helping to build its infrastructure.

Question 6

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

Globalization of production refers to companies sourcing goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production (e.g., labor, energy, land, and capital). Tanner Inc. outsourcing writing services to India is an example of this, as the company is leveraging the cost advantages and skills available in another country.

Question 7

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 considered consumer products because they are bought and used by individuals for personal or household purposes, rather than for manufacturing or production processes.

Question 8

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 large market created by the Commerce Coalition (CC) is an example of a globalized market because it involves multiple countries in South Asia coming together to enable free trade across their borders, allowing goods to be purchased without additional taxes, thus promoting international trade and economic integration.

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 and exploiting price differences for the same asset or product in different markets. It is not limited to manufacturing (A), does not treat differences across nations merely as constraints (C), and is not confined to obtaining resources from domestic markets (D).

Question 10

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 European Union (EU) creates a single, large market among its member states, allowing for the free movement of goods, services, capital, and people. This integration facilitates a globalized market environment within the EU, where products like Italian-made bags can be sold in Spain without additional taxes, promoting trade and economic cooperation among member states.

Question 11

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 taking advantage of national differences in cost and quality to produce goods and services more efficiently and effectively.

Question 12

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 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 factors of production because they are essential inputs in the manufacturing process, contributing directly to the production of goods.

Question 14

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

Globalization often involves the integration of economies and cultures, which can strengthen international relationships. However, it does not inherently increase socioeconomic equality or make international trade and job relocation more difficult.

Question 15

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, when used in steel production, serves as an industrial product because it is a raw material used in manufacturing processes, specifically in the production of steel, rather than being a product purchased directly by the final consumer for personal use.

Question 16

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 facilitated globalization by enabling massive investments in telecommunications infrastructure, such as fiber-optic cables, which enhance global connectivity and communication.

Question 17

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

Thomas Friedman, in his book "The World is Flat," argues that globalization and technological advancements have leveled the playing field, allowing individuals in less developed countries to compete with those in more developed countries.

Question 18

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

Russet Inc. sourcing iron ore from Australia for steel manufacturing demonstrates the globalization of production, as it involves obtaining raw materials from a global source to minimize costs and improve efficiency.

Question 19

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

Limestone, shells, and chalk are physical inputs necessary for producing cement, making them factors of production for the cement industry. Factors of production include all resources needed for the creation of a good or service, such as labor, land, and capital.

Question 20

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 expansion into 64 countries and having offices in 36 countries exemplifies globalization, which refers to the process by which businesses or other organizations develop international influence or start operating on an international scale.

Quiz 1: Globalization

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) _____.

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 examples best illustrates the globalization of production?

Which of the following is true of arbitrage?

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) _____.

Which of the following is true of globalization of production?

Which of the following best illustrates global convergence?

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 is true of globalization?

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

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

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

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 _____.

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.

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 _____.