Question 1

National competitive advantage derives from four conditions,one of which is factor conditions.What do factor conditions include?

Accepted Answer

D)Factor conditions, or factors of production, include labor, capital, entrepreneurs, physical resources and information resources.

Question 2

Which of the following is illegal in the United States?

Accepted Answer

E)Dumping and cartels are both illegal in the United States.

Question 3

Suppose that the United States requires that products sold here be at least 51 percent made here.Which of the following denotes this type of policy?

Accepted Answer

E)Local content laws are requirements that products sold in a country be at least partly made there.

Question 4

In which international organization structure does a firm have greatest control over foreign activities?

Accepted Answer

B)Strategic alliances give firms greater control over foreign activities than agents and licensees.

Question 5

U.S.imports of Canadian softwood timber are limited to 14.7 billion board feet per year.What is this practice called?

Accepted Answer

E)A quota restricts the number or amount of certain types of products that can be imported.

Question 6

Which statement is true regarding independent agents?

Accepted Answer

C)Independent agents act as sales representatives, representing many exporters in foreign markets.

Question 7

In Germany,Wal-Mart has been required to buy existing retailers rather than open brand-new stores.What does this illustrate?

Accepted Answer

E)Host countries govern business practices within their jurisdictions through various business practice laws.

Question 8

In some South American countries,it is sometimes legal to bribe other businesses and government officials,while this practice is illegal in the United States.Which of the following refers to this type of policy?

Accepted Answer

B)Every country has its own business practice laws by which they govern business practices.

Question 9

Which of the following types of firms design,produce,and manufacture products in many nations?

Accepted Answer

A)Multinational firms design, produce and market products in many countries; in addition, headquarters locations are almost irrelevant.

Question 10

Country Z can produce pig iron more efficiently than any other goods.Which type of advantage in pig iron does Country Z have?

Accepted Answer

C)When a country can produce a good more efficiently than it can produce any other good, that country is said to have a comparative advantage in that efficiently produced good.

Question 11

Which of the following types of tariff is meant to discourage the import of particular products?

Accepted Answer

E)Protectionist tariffs discourage particular imports.

Question 12

Which of the following goals is a primary purpose of tariffs on imports?

Accepted Answer

A)Most tariffs are meant to discourage particular imports in order that domestic businesses may remain competitive.

Question 13

To avoid transportation costs and tariffs,Apics Enterprises gave exclusive rights to Svenson AB in Finland to produce its product.What is this an example of?

Accepted Answer

A)In licensing arrangements, firms give foreign companies exclusive rights to manufacture or market their products in that market.

Question 14

Which of the following resulted from NAFTA?

Accepted Answer

C)Many positive predictions regarding what would result from NAFTA have materialized, including the increase in U.S. exports to Mexico.

Question 15

Which of the following refers to tariffs that are imposed strictly to raise money for the government?

Accepted Answer

A)Revenue tariffs raise money for the government.

Question 16

Which of the following types of payments are usually received by an exporter as an ongoing payment calculated as a percentage of the license holder's sales?

Accepted Answer

B)The exporter receives a fee plus ongoing payments, or royalties, calculated as a percentage of the license holder's sales.

Question 17

The U.S.government forbids the importation of cigars from Cuba.What is this practice called?

Accepted Answer

A)An embargo is a government order forbidding exportation/importation of certain products.

Question 18

Which of the following exists when a country can produce something more cheaply and/or of higher quality than any other country can?

Accepted Answer

D)An absolute advantage, though rare, exists when a country can produce something more cheaply and/or of higher quality than any other country can.

Question 19

China and India require that when foreign firms enter into joint ventures with local firms,the local partners must have the controlling ownership stake.What is this an example of?

Accepted Answer

A)Local content laws are requirements that products sold in a country be at least partly made there. Firms seeking to do business in a country must either invest there directly or take on a domestic partner.

Question 20

Which of the following is NOT considered an international organizational structure?

Accepted Answer

E)International organizational structures include independent agents, licensing arrangements, branch offices, strategic alliances, and foreign direct investment.

Quiz 4: Understanding the Global Context of Business