Question 1

How has international trade changed since the end of World War II?

Accepted Answer

Since the end of World War II, international trade has continued to increase steadily. This is due in part to the creation of international organizations such as the World Trade Organization and the General Agreement on Tariffs and Trade, which have helped to promote free trade and reduce barriers to trade between nations. The growth of international trade has also been fueled by technological advancements in transportation and communication that have made it easier for companies to do business across borders.

Question 2

____ is the ability to produce a specific product more efficiently than any other product.

Accepted Answer

The answer of ____ is the ability to produce a...

Question 3

The land of Narnack has very infertile soil but a large supply of oil.What action should Narnack take? Narnack should

Accepted Answer

Since Narnack has infertile soil, it will not be practical to try to grow food. However, the country has a large supply of oil which it can specialize in producing and trade for food and other needed products. This will allow the country to use its resources efficiently and still meet the basic needs of its people.

Question 4

By definition,every country has a(n)____ advantage in some product.

Accepted Answer

The concept of comparative advantage suggests that countries should specialize in producing goods and services that they can produce most efficiently (i.e. at a lower opportunity cost) compared to other countries. This allows them to trade with other countries, and both sides can benefit from the exchange. Therefore, every country has a comparative advantage in some product or service, even if they do not have an absolute advantage (i.e. they are not the most efficient producer) in any particular product.

Question 5

Which of the following scenarios would not be considered international business?

Accepted Answer

The scenario described in D involves companies from within the United States only and does not involve any international transactions.

Question 6

Because Saudi Arabia and Australia have ____,Saudi Arabia can specialize in the production of crude oil and petroleum products,and Australia can specialize in the production of wool.

Accepted Answer

The answer of Because Saudi Arabia and Australia have ____,Saudi...

Question 7

Because it controls the world's diamond deposits,the DeBeers Consolidated Mines,Ltd.,has a(n)

Accepted Answer

DeBeers Consolidated Mines, Ltd. has an absolute advantage in the diamond market as they have exclusive control over the world's diamond deposits. This gives them an inherent advantage over other diamond mining companies who do not possess such control.

Question 8

Thomas Bernerd,Inc.Thomas Bernerd,Inc.,manufactures and sells reclining furniture.The company currently operates in the United States but wishes to expand overseas.The company managers have been contemplating the best way to enter the foreign market.At first,the management felt it would be in the company's best interest to let a foreign company use its product and brand in exchange for a royalty.The managers recognized,however,that before the company decided on its foreign strategy it needed to think through all the steps required to enter an international market.As such,the managers believed they needed to consult with some type of agency to help their firm compete more effectively in the global marketplace.After all the research was completed,the senior managers realized that they wanted to export their product.The managers decided that the transport carrier would notify them when the merchandise was shipped.This would avoid any confusion about lost shipments and ensure better communication with the receiving parties.
-Refer to Thomas Bernerd,Inc.When the transport carriers notify the exporter that the product has been shipped,they use a

Accepted Answer

A bill of lading is a legal document that serves as proof of shipment and receipt of goods. It contains information about the type and quantity of goods being transported, the names of the exporter and importer, the carrier, and the terms of the agreement. By using a bill of lading, the transport carrier notifies the exporter that the product has been shipped and provides important information to the receiving parties. Therefore, option A is the best choice.

Question 9

A new country is formed in central Africa.It has no absolute advantage in crude oil,diamonds,or wool.However,it does manufacture high-quality bows and arrows for specialized safari adventures.Which of the following statements is true?

Accepted Answer

The new country may not have an absolute advantage in any particular product, but it may still have a comparative advantage in the production of some goods or services. In this case, the country manufactures high-quality bows and arrows, which suggests that it has a lower opportunity cost of producing those items compared to other goods or services. As a result, the new country should focus on producing and exporting bows and arrows to take advantage of its comparative advantage.

Question 10

Thomas Bernerd,Inc.Thomas Bernerd,Inc.,manufactures and sells reclining furniture.The company currently operates in the United States but wishes to expand overseas.The company managers have been contemplating the best way to enter the foreign market.At first,the management felt it would be in the company's best interest to let a foreign company use its product and brand in exchange for a royalty.The managers recognized,however,that before the company decided on its foreign strategy it needed to think through all the steps required to enter an international market.As such,the managers believed they needed to consult with some type of agency to help their firm compete more effectively in the global marketplace.After all the research was completed,the senior managers realized that they wanted to export their product.The managers decided that the transport carrier would notify them when the merchandise was shipped.This would avoid any confusion about lost shipments and ensure better communication with the receiving parties.
-Refer to Thomas Bernerd,Inc.Initially,the managers believed that ____ would be the best option for entering the foreign market.

Accepted Answer

The initial thought of the managers was to license their product and brand to a foreign company in exchange for a royalty. However, after further research, they decided to export their product instead. Therefore, the best choice is C, licensing, as it was the original idea of the managers.

Question 11

Landfall Service Landfall Service is a lawn furniture company that has been around for many years.It is known for its ability to produce furniture more efficiently than any other company in the nation.In truth,no other companies in any other nation come close.Landfall Service has shipped many of its products internationally.In fact,80 percent of its profits come from international sales.However,the Italian government has imposed a tax on imported furniture items to protect local companies.The Brazilian government,on the other hand,has imposed taxes on Landfall Service products due to the government wanting a piece of the pie.Landfall Service initially thought that these taxes were unfair because it was being singled out.However,after Landfall Service contacted the organization that had the power to mediate this situation,the furniture company realized that the taxation it was subjected to was legal and that there was nothing it could do about it.
-Refer to Landfall Service.The Landfall Service does mostly

Accepted Answer

The passage states that Landfall Service is known for producing furniture more efficiently than any other company in the nation, has shipped many of its products internationally, and 80 percent of its profits come from international sales. Therefore, it can be inferred that the company mostly engages in exporting.

Question 12

If Japan were regarded as the best electronics manufacturer in the world,what would be true?

Accepted Answer

The answer of If Japan were regarded as the best...

Question 13

Thomas Bernerd,Inc.Thomas Bernerd,Inc.,manufactures and sells reclining furniture.The company currently operates in the United States but wishes to expand overseas.The company managers have been contemplating the best way to enter the foreign market.At first,the management felt it would be in the company's best interest to let a foreign company use its product and brand in exchange for a royalty.The managers recognized,however,that before the company decided on its foreign strategy it needed to think through all the steps required to enter an international market.As such,the managers believed they needed to consult with some type of agency to help their firm compete more effectively in the global marketplace.After all the research was completed,the senior managers realized that they wanted to export their product.The managers decided that the transport carrier would notify them when the merchandise was shipped.This would avoid any confusion about lost shipments and ensure better communication with the receiving parties.
-Refer to Thomas Bernerd,Inc.Which agency should the managers at Thomas Bernerd,Inc.seek assistance from?

Accepted Answer

The managers at Thomas Bernerd,Inc. should seek assistance from U.S. Export Assistance Centers as they help small and medium-sized businesses in the U.S. to export their products and compete in the global marketplace. They can provide export education, trade counseling and advice, and assistance in developing an export strategy, among other services.

Question 14

Selling and shipping raw materials or products to other nations is called

Accepted Answer

Exporting refers to the process of selling and shipping raw materials or products to other countries.

Question 15

Although it lacks sources of timber and oil,Chablis has a plentiful supply of grapes for its many wineries.Which statement about Chablis is true?

Accepted Answer

The statement indicates that Chablis has a plentiful supply of grapes, which suggests that it is more efficient at producing wine than other goods. This implies that Chablis has a comparative advantage in wine production.

Question 16

Landfall Service Landfall Service is a lawn furniture company that has been around for many years.It is known for its ability to produce furniture more efficiently than any other company in the nation.In truth,no other companies in any other nation come close.Landfall Service has shipped many of its products internationally.In fact,80 percent of its profits come from international sales.However,the Italian government has imposed a tax on imported furniture items to protect local companies.The Brazilian government,on the other hand,has imposed taxes on Landfall Service products due to the government wanting a piece of the pie.Landfall Service initially thought that these taxes were unfair because it was being singled out.However,after Landfall Service contacted the organization that had the power to mediate this situation,the furniture company realized that the taxation it was subjected to was legal and that there was nothing it could do about it.
-Refer to Landfall Service.Landfall Service must have contacted which of these organizations to mediate regarding unfair treatment by foreign governments?

Accepted Answer

The World Trade Organization (WTO) has the power to mediate trade disputes between countries. Landfall Service would have contacted the WTO to mediate their situation when faced with unfair treatment by foreign governments.

Question 17

Thomas Bernerd,Inc.Thomas Bernerd,Inc.,manufactures and sells reclining furniture.The company currently operates in the United States but wishes to expand overseas.The company managers have been contemplating the best way to enter the foreign market.At first,the management felt it would be in the company's best interest to let a foreign company use its product and brand in exchange for a royalty.The managers recognized,however,that before the company decided on its foreign strategy it needed to think through all the steps required to enter an international market.As such,the managers believed they needed to consult with some type of agency to help their firm compete more effectively in the global marketplace.After all the research was completed,the senior managers realized that they wanted to export their product.The managers decided that the transport carrier would notify them when the merchandise was shipped.This would avoid any confusion about lost shipments and ensure better communication with the receiving parties.
-Refer to Thomas Bernerd,Inc.Which of the following alternatives could have worked as a link between the managers at Thomas Bernerd,Inc.and the buyer from a different country?

Accepted Answer

A trading company serves as a link between the exporting firm and the buying firm in a foreign market. They help with market research, distribution, transportation, and documentation. This would be the best choice for Thomas Bernerd, Inc. to enter the foreign market. International barter and counter trade involve exchanging goods and services instead of using money, which may not be suitable for Thomas Bernerd, Inc. Comparative trading involves buying and selling goods in different markets to take advantage of price differences, which is not relevant to exporting furniture. Foreign-exchange control refers to government regulations on foreign currency transactions and would not be a direct link between the exporting firm and the foreign buyer.

Question 18

The United Kingdom sells industrial supplies and materials to many nations around the world.The United Kingdom thus engages in

Accepted Answer

The United Kingdom is selling industrial supplies and materials to many nations around the world, which means they are engaged in exporting.

Question 19

Thomas Bernerd,Inc.Thomas Bernerd,Inc.,manufactures and sells reclining furniture.The company currently operates in the United States but wishes to expand overseas.The company managers have been contemplating the best way to enter the foreign market.At first,the management felt it would be in the company's best interest to let a foreign company use its product and brand in exchange for a royalty.The managers recognized,however,that before the company decided on its foreign strategy it needed to think through all the steps required to enter an international market.As such,the managers believed they needed to consult with some type of agency to help their firm compete more effectively in the global marketplace.After all the research was completed,the senior managers realized that they wanted to export their product.The managers decided that the transport carrier would notify them when the merchandise was shipped.This would avoid any confusion about lost shipments and ensure better communication with the receiving parties.
-Refer to Thomas Bernerd,Inc.Which of the following options is not one of the steps needed for entering an international market?

Accepted Answer

While it is true that contacting local government to see if taxes on trade can be waived can be helpful, it is not a necessary step in entering an international market. The other options listed are all critical steps, including establishing an overseas distribution network, setting export prices and payment terms, methods, and techniques, identifying key foreign markets for the product, and identifying exportable products.

Question 20

Purchasing products or materials in other nations and bringing them into one's own country is

Accepted Answer

Importing refers to the act of buying products or materials from other countries and bringing them into one's own country.

Quiz 3: Global Business