Question 1

________ refer(s)to the creative ideas,innovative expertise,or intangible insights that give an individual,company,or country a competitive advantage.

Accepted Answer

Intellectual property refers to the intangible assets that give a competitive advantage. This includes patents, trademarks, copyrights, and trade secrets. These assets are legally protected and can provide benefits such as increased revenue, market share, and brand recognition.

Question 2

Which of the following statements referring to intellectual property rights and violations is INCORRECT?

Accepted Answer

Companies cannot register a global patent, trademark, or copyright through the World Trade Organization (WTO). These rights have to be registered separately in each country. The WTO provides a framework for intellectual property rules and agreements, but individual member countries are responsible for implementing and enforcing their own laws.

Question 3

All of the following are reasons piracy has occurred EXCEPT ________.

Accepted Answer

The protection of intellectual property rights varies greatly from country to country, so this choice is the opposite of the statement made in the question stem. A, B, and C are all valid reasons for piracy.

Question 4

Skinner Electronics plans to expand into foreign markets. Top executives want the firm to focus only on locations where the rule of law prevails. Which of the following should most likely be considered by Skinner?

Accepted Answer

Wealthier, westernized countries are more likely to have a stable rule of law and a business-friendly environment. Developing, non-Western countries and emerging economies experiencing rapid growth may have less predictable legal systems and business practices. Countries inclined toward totalitarian-style government may have restricted economic freedoms and potentially unstable legal systems.

Question 5

Which of the following is most likely a true statement regarding the rule of law? The rule of law is a hallmark of ________.

Accepted Answer

The rule of law is a fundamental principle of a democratic government. It ensures that all individuals, including those in power, are subject to the law and that everyone is treated equally under the law. In a totalitarian government, power is concentrated in the hands of a single leader or group, and the rule of law may not exist or may be heavily compromised. Similarly, in societies that place ultimate power in the hands of one person, such as a monarchy or dictatorship, the rule of law may not have the same level of importance. "Partly free" countries may have some limitations on the rule of law, but it is still an important concept and goal for their governments.

Question 6

Countries often use local content regulations to determine the proportion of the product that must be made in the local market versus made outside of the local market in order to ________.

Accepted Answer

Local content regulations are often used as a protectionist trade policy to support domestic companies and industries by limiting imports from foreign markets. This is done to ensure that a certain percentage of the product is made within the local market, thus favoring local companies.

Question 7

Premium Manufacturing is planning to expand operations overseas. Executives at the firm are considering a number of different countries. Which of the following countries would most likely have the lowest start-up costs?

Accepted Answer

The answer of Premium Manufacturing is planning to expand operations...

Question 8

Most counterfeit goods are made in markets in which ________ is the basis of the legal system.

Accepted Answer

The rule of man is a legal system in which the decisions and actions of individuals, rather than laws, govern society. This type of system allows for corruption and bribery, which can lead to the production and sale of counterfeit goods.

Question 9

Harmon Clothing has a production facility located in Venezuela. Recently,Harmon has been unable to arrange for overseas loans due to the burdensome regulatory policies of the Venezuelan government. Which type of political risk is Harmon most likely experiencing?

Accepted Answer

Systemic political risk involves changes in policies or regulations that affect all companies operating within a country. Harmon's inability to secure overseas loans due to the Venezuelan government's regulatory policies is an example of systemic risk, as these policies likely affect all businesses in the country, not just Harmon.

Question 10

The vigor of IPR protection is highly related to a country's stage of ________.

Accepted Answer

The vigor of IPR protection is highly related to a country's stage of economic development. Countries with higher levels of economic development tend to prioritize protecting intellectual property rights because innovation and creativity become more important drivers of growth in these societies. In addition, advanced economies tend to have a higher level of technological advancement and therefore rely on strong IPR protection to maintain their competitive edge.

Question 11

Wharton Enterprises,a U.S. firm,manufactures small kitchen appliances. The firm has recently developed an innovative blender design that Wharton executives anticipate being very profitable. Currently,Wharton has production facilities in the U.S. and China. Wharton executives are trying to determine where the new product should be manufactured. Which of the following best supports a decision to manufacture the new product in the U.S. instead of China?

Accepted Answer

Intellectual property rights are strongly protected by U.S. patent laws. This would be important for a new and innovative product, as it would ensure that Wharton's design is not stolen or replicated by competitors. In China, intellectual property rights are not always strongly protected, which increases the risk of competitors copying the design.

Question 12

Garnet Footwear suffered significant financial losses and had to close its foreign operations. The dissolution process took six months and cost four percent of the firm's estate. Where was Garnet's foreign operations most likely located?

Accepted Answer

The dissolution process took six months and cost four percent of the firm's estate. This suggests that Garnet's foreign operations were likely located in a country with a complex legal system and high dissolution costs, such as Japan.

Question 13

Local content regulations are primarily intended to ________.

Accepted Answer

Local content regulations are designed to encourage multinational enterprises (MNEs) to increase their production activities in a country, thereby creating jobs and contributing to the local economy. These regulations often require a certain percentage of local content, such as materials, labor, or technology, to be used in the production process. By doing so, MNEs are seen as investing in the local economy and not just extracting profits without contributing to the country's development.

Question 14

Rockwall Enterprises is planning to expand the firm by establishing operations outside of the U.S. In which of the following countries would Rockwall most likely be able to establish operations most quickly?

Accepted Answer

Australia has a similar legal system to the U.S. and a stable political climate, which may make establishing operations there easier and quicker compared to the other options.

Question 15

Elite Manufacturing seeks a foreign location with a highly favorable business environment and a comprehensive legal code. Which of the following countries would be most suitable for Elite?

Accepted Answer

Singapore is consistently ranked as one of the easiest countries to do business in the world, with a transparent regulatory environment and a comprehensive legal system based on British common law. Japan, Canada, and the UK are also favorable business environments, but Singapore stands out for its ease of doing business and legal system.

Question 16

The largest percentage of nations,within a contiguous geographic region,that adhere to the rule of man are located in ________.

Accepted Answer

The answer of The largest percentage of nations,within a contiguous...

Question 17

Countries with a ________ legal system tend to encourage precise,detailed contracts,whereas countries with a ________ legal system tend to encourage shorter and less specific contracts.

Accepted Answer

The two types of legal systems that are commonly discussed in the context of international business are "common law" and "civil law". Common law systems tend to rely on case law and precedent, whereas civil law systems are based on written statutes and codes. In common law systems, the courts have more discretion to interpret contracts and apply the law to specific factual situations. This makes contracts more open-ended and less specific. In contrast, civil law systems tend to be more rigid and rule-based, which means that contracts need to be more precise and detailed to avoid ambiguity. Therefore, option B is the correct answer. The other options do not accurately reflect the differences between legal systems and their impact on contracts.

Question 18

Logan Electronics has a production facility in Bolivia. Recently,the firm was taxed at a significantly higher rate than a local electronics company. Which type of political risk is Logan most likely experiencing?

Accepted Answer

The answer of Logan Electronics has a production facility in...

Question 19

ION Software is the registered owner of a program designed to help sort and organize incoming and outgoing e-mail. Which of the following legal conventions does ION most likely have?

Accepted Answer

As the registered owner of a program, ION Software most likely has an intellectual property right, which is a legal convention that grants exclusive rights to the owner of a creative work. This right includes the right to control the copying, distribution, and use of the work, and is typically granted through copyright, patents, or trademarks. In this case, it is likely that ION Software has a copyright on the program. Trademark credentials refer to a symbol or phrase used to identify and distinguish a company's products or services from those of others. A patent certificate refers to a grant of exclusive rights to an inventor or assignee for an invention. TRIPS (Trade-Related Aspects of Intellectual Property Rights) is an international agreement that sets minimum standards for intellectual property protection in member countries of the World Trade Organization. While ION Software may have a TRIPS permit to protect its intellectual property in certain countries, it is not the most likely legal convention in this scenario.

Question 20

Wharton Enterprises,a U.S. firm,manufactures small kitchen appliances. The firm has recently developed an innovative blender design that Wharton executives anticipate being very profitable. Currently,Wharton has production facilities in the U.S. and China. Wharton executives are trying to determine where the new product should be manufactured. Which of the following questions is most relevant to the decision?

Accepted Answer

The answer of Wharton Enterprises,a U.S. firm,manufactures small kitchen appliances....

Quiz 3: The Political and Legal Environments Facing Business

________ refer(s) to the creative ideas,innovative expertise,or intangible insights that give an individual,company,or country a competitive advantage.