Question 1

Discuss the concept of a bill of exchange.

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Question 2

What is a tariff? What are the three basic ways in which tariffs may be levied?

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Question 3

What is the difference between forfaiting and factoring?

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Question 4

_____ by business is not viewed as an acceptable practice, but when governments enter the field of price administration, they presume to do it for the general welfare to lessen the effects of "destructive" competition.

Accepted Answer

Price fixing by business is not viewed as an acceptable practice (at least in the domestic market), but when governments enter the field of price administration, they presume to do it for the general welfare to lessen the effects of "destructive" competition.

Question 5

A _____ exists when various companies producing similar products or services work together to control markets for the types of goods and services they produce.

Accepted Answer

A cartel exists when various companies producing similar products or services work together to control markets for the types of goods and services they produce.

Question 6

What is the difference between variable-cost pricing and full-cost pricing?

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Question 7

Discuss the meaning of and nature of cartels. Are these groups beneficial or not? Create an example to illustrate your stance.

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Question 8

A(n) _____ means that once the seller has accepted the credit, the buyer cannot alter it in any way without permission of the seller.

Accepted Answer

An irrevocable letter of credit means that once the seller has accepted the credit, the buyer cannot alter it in any way without permission of the seller.

Question 9

In ____, a company has an ongoing relationship with a bank that routinely buys its short-term accounts receivable at a discount.

Accepted Answer

In factoring, a company has an ongoing relationship with a bank that routinely buys its short-term accounts receivable at a discount-in other words, the bank acts as a collections department for its client.

Question 10

In U.S. domestic trade, the typical payment procedure for established customers is a(n):

Accepted Answer

In U.S. domestic trade, the typical payment procedure for established customers is an open account-that is, the goods are delivered, and the customer is billed on an end-of-the-month basis.

Question 11

Which of the following obviously leave(s) sellers in a position where most of the problems of international commercial finance work to their disadvantage?

Accepted Answer

Open accounts obviously leave sellers in a position where most of the problems of international commercial finance work to their disadvantage.

Question 12

Explain the two different views of what constitutes price decisions.

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Question 13

What is a countertrade? What are the problems of countertrading?

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Question 14

Explain the process called parallel importing.

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Question 15

Except for cash in advance, _____ afford(s) the greatest degree of protection for the seller.

Accepted Answer

Except for cash in advance, letters of credit afford the greatest degree of protection for the seller.

Question 16

Although full payment in advance is employed infrequently, partial payment (from ______ to _____ percent) in advance is not unusual when the character of the merchandise is such that an incomplete contract can result in heavy loss.

Accepted Answer

Although full payment in advance is employed infrequently, partial payment (from 25 to 50 percent) in advance is not unusual when the character of the merchandise is such that an incomplete contract can result in heavy loss.

Question 17

In ____, the seller makes a one-time arrangement with a bank to buy a specific account receivable.

Accepted Answer

In forfaiting, the seller makes a one-time arrangement with a bank to buy a specific account receivable.

Question 18

With ____, the seller assumes all risk until the actual dollars are received.

Accepted Answer

With bills of exchange (also known as dollar drafts), the seller assumes all risk until the actual dollars are received.

Question 19

A reasonable price for goods in the home market may more than double in the foreign market. How do channel length and transportation costs contribute to the price increase?

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Question 20

Explain the two distinct views of what constitutes dumping.

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Quiz 18: Pricing for International Markets