Question 1

Greater profits may be obtained by either increasing total revenue or decreasing the cost of goods sold.

Accepted Answer

Greater profits can be achieved through either increasing revenue or decreasing costs. This principle is often referred to as the profit equation or profit formula: Profit = Revenue - Cost. By increasing revenue or decreasing costs, a company can increase its profit.

Question 2

Environment as used in the textbook is the forces surrounding and influencing the life and development of the firm and is classified as

Accepted Answer

The definition of environment in the textbook specifically mentions two categories - uncontrollable (external) and controllable (internal) - indicating that the most appropriate choice is E. The other choices - A, B, C, and D - either do not capture the fundamental dichotomy of controllable vs. uncontrollable or use different categorizations altogether.

Question 3

The kinds of forces in the foreign environment are __________ those in the domestic environment except that they occur in foreign nations.

Accepted Answer

The statement says that the forces in the foreign environment are the same as those in the domestic environment, except that they occur in foreign nations. Hence, option B, "the same as" is the best choice. Options A, C, and D are all incorrect as they imply differences between the two environments.

Question 4

An international business

Accepted Answer

An international business is a business that involves crossing national borders through its activities, such as importing and exporting goods, or having offices or subsidiaries in multiple countries. It goes beyond just operating domestically in a foreign country or attempting to standardize operations worldwide. It also may have multicountry affiliates, but that is not the defining characteristic.

Question 5

International business differs from domestic business in that a firm operating across borders must deal with

Accepted Answer

International business involves dealing with three types of environments - the domestic environment of the home country, the foreign environment of the host country, and the international environment that includes global institutions and global trade and investment frameworks. Therefore, option A is the correct answer.

Question 6

Firms that have substantial operations in more than one country are called

Accepted Answer

Firms with substantial operations in more than one country are typically referred to as international companies.

Question 7

The increased internationalization of business requires __________ to have a basic knowledge of international business.

Accepted Answer

With the increased internationalization of business, all managers need to have a basic knowledge of international business so they can understand the global marketplace, manage diverse teams and cultures, and navigate international regulations and laws.

Question 8

There are many outstanding international career opportunities for people with desirable interpersonal and language skills that are not in mainstream business but may require basic business expertise.

Accepted Answer

It is true that there are international career opportunities for people with excellent interpersonal skills and language skills, even in fields outside of mainstream business. However, some basic business knowledge may still be required.

Question 9

The reasons international firms enter foreign markets are all linked to either (1) the desire to increase profits or (2) the desire to increase sales.

Accepted Answer

While increasing profits and sales are common reasons, firms may also enter foreign markets for strategic reasons such as diversification, gaining competitive advantage, accessing new technologies, or responding to competitive pressures.

Question 10

The forces over which the management does have some command are called

Accepted Answer

The forces that are internal to the organization but can be controlled by management (such as the company's policies, culture, and strategies) are called internal, controllable forces. The other choices are either incorrect or incomplete.

Question 11

A global company is

Accepted Answer

The answer of A global company is
...

Question 12

International business differs from domestic business in that a firm operating across borders must deal with what environmental forces?

Accepted Answer

International business involves dealing with environmental forces from both domestic and foreign markets, as well as unique international forces such as trade policies, cultural differences, varying legal systems, and diverse economic conditions. It is, therefore, important for firms operating across borders to understand and adapt to these diverse environmental forces in order to succeed in international business.

Question 13

The domestic environment is composed of all the uncontrollable forces originating in the __________ that surround and influence the life and development of the firm.

Accepted Answer

The term "domestic" refers to the home country or the country in which the firm is based. Therefore, the uncontrollable forces that surround and influence the firm's development are part of the domestic environment, which is distinct from the international or foreign environment. Option A refers to forces in other countries, while options B, D, and E are synonymous with international or foreign.

Question 14

Foreign business denotes

Accepted Answer

The answer of Foreign business denotes
...

Question 15

Changing the method of going abroad from exporting to overseas production is often necessary to protect foreign markets.

Accepted Answer

Exporting products to foreign markets can lead to market saturation and increased competition, causing the loss of market share. By establishing overseas production, a company can better protect its foreign markets and increase its competitiveness.

Question 16

Foreign environmental forces often operate differently than domestic environmental forces because

Accepted Answer

Foreign environmental forces may have different values and attitudes than domestic forces, making it difficult for managers to effectively assess and respond to these forces. This can include differences in cultural, political, economic, and legal factors that affect businesses operating in foreign markets. It is important for managers to understand these differences and adapt their strategies accordingly.

Question 17

Examples of the kinds of uncontrollable forces listed in the text are

Accepted Answer

The text lists both competitive and technological as uncontrollable forces, but does not mention gravitational forces. Therefore, the best choice is D - competitive and technological.

Question 18

Management has no direct control over the external environment of the firm but can exert influence by

Accepted Answer

Management can influence the external environment by lobbying for legal changes and promoting products to shift cultural attitudes.

Question 19

In organizing their international activities,there are five dimensions along which management can globalize or standardize these activities.

Accepted Answer

The answer of In organizing their international activities,there are five...

Question 20

A multidomestic company is

Accepted Answer

A multidomestic company is an organization with multicountry affiliates that operates independently in each country it does business in. These affiliates tailor their products and services to the needs of the local market, rather than implementing standardized operations worldwide.

Quiz 1: The Challenging World of International Business