Question 1

A(n) ________ is an intermediary (often an individual or a small firm) that handles orders to buy and sell commodities, products, and services in international business transactions for a commission.

Accepted Answer

An agent is an intermediary who represents a buyer or seller in transactions, and earns a commission based on the value of the transaction. They are commonly used in international trade to facilitate deals and provide local knowledge and expertise. Licensor and franchisor refer to specific types of business relationships, and a foreign distributor refers specifically to a company that buys and resells products in another country, whereas an agent may not necessarily take physical possession of the products.

Question 2

Dealing directly with foreign-based retailers is efficient because ________.

Accepted Answer

Dealing directly with foreign-based retailers eliminates the middlemen, shortening the distribution channel and making the process more efficient. It also enables companies to have greater control over the pricing, packaging and promotion of their products. However, it may not necessarily enhance brand image or create market monopolies and does not eliminate competition.

Question 3

Trading companies play an important role in Japan's external trade because Japan ________.

Accepted Answer

Japan is known for having limited natural resources, which makes it dependent on imports. Trading companies help facilitate and manage Japan's external trade activities by sourcing and procuring necessary resources and goods from other countries.

Question 4

Which of the following is true with regard to online intermediaries?

Accepted Answer

Online intermediaries facilitate transactions between buyers and sellers globally, often providing platforms for e-commerce and digital marketplaces.

Question 5

________ assume the international marketing function on behalf of producers, especially those with limited international business experience.

Accepted Answer

The answer of ________ assume the international marketing function on...

Question 6

Distribution channel intermediaries perform all of the following functions for focal firms EXCEPT ________.

Accepted Answer

Distribution channel intermediaries do not perform production functions for focal firms. They may perform advertising, customer service, and warehousing functions, but their role is primarily to facilitate the movement of goods and services from producers to consumers. Production is the responsibility of the focal firm or its suppliers.

Question 7

A(n) ________ is an intermediary contracted by the exporter to represent and sell its merchandise or services in a designated country or territory.

Accepted Answer

An agent is contracted by the exporter to represent and sell its merchandise or services in a designated country or territory. A licensor grants the right to use its intellectual property to another entity. A retailer sells products directly to consumers. A franchisor grants the right to use its business model to another entity.

Question 8

A(n) ________ is a crossborder business alliance in which partnering firms pool their resources to create a new venture, sharing the associated costs and risks.

Accepted Answer

A crossborder business alliance in which partnering firms pool their resources to create a new venture, sharing the associated costs and risks is called an international collaborative venture. Choices A, B, and C are not appropriate definitions for this term.

Question 9

In a market consisting of many small, widely dispersed buyers and sellers, the function of which of the following is especially important?

Accepted Answer

In a market consisting of many small, widely dispersed buyers and sellers, the function of agents is especially important. This is because agents act as intermediaries between buyers and sellers, facilitating transactions and bridging the information gap between the two parties. Agents can help to locate potential trading partners and negotiate contracts, making it easier for small buyers and sellers to conduct business in such a market. Foreign distributors, licensors, and retailers may also play important roles in certain markets, but they are not as essential in a market characterized by small, widely dispersed buyers and sellers.

Question 10

Collaborative arrangements help focal firms to ________.

Accepted Answer

Collaborative arrangements allow focal firms to work with other firms in their value chain to configure the chain more effectively. This can lead to increased efficiency and competitiveness in the market. Collaborating can help identify process improvements, reduce costs, and improve quality, among other benefits. It is also a way for firms to mitigate risks and share resources. Collaborating does not necessarily lead to monopolies, is not specifically focused on monitoring and controlling employee behavior, and may or may not help connect with domestic customers depending on the specific collaboration.

Question 11

Commercial banks facilitate the operations of international businesses by doing all of the following EXCEPT ________.

Accepted Answer

Commercial banks do not regulate national money supplies; instead, that is typically the role of a central bank or national government. Commercial banks do provide a variety of services that facilitate international business transactions, including transferring funds, providing credit information, and extending credit to buyers and sellers.

Question 12

An increasingly popular type of turnkey contract in the developing economies is the ________, in which the contractors acquire an ownership stake in the facility for a period of time until it is turned over to the client.

Accepted Answer

The description matches the concept of a build-own-transfer (BOT) venture. In this type of contract, the contractors fund and construct the facility, own and operate it for a certain period, and ultimately transfer the ownership back to the client. It is a popular model for infrastructure projects in emerging economies where private investment is needed.

Question 13

Common carriers are firms that ________.

Accepted Answer

Common carriers own and operate transportation equipment such as ships, trucks, and airplanes to transport goods for hire. Options A, B, and D do not accurately describe the role of common carriers.

Question 14

Foreign distributors that purchase products from exporters for resale at a profit are known as ________.

Accepted Answer

Merchant distributors purchase products from exporters and then resell them at a profit, therefore they are responsible for distributing the products globally. Brokers are intermediaries who connect buyers and sellers, but do not actually purchase and resell products. Domestic intermediaries and sales representatives operate within a specific domestic market and do not involve foreign distribution.

Question 15

A focal firm that creates and owns a new legal entity through equity investment or pooling of assets is called a(n) ________.

Accepted Answer

A joint venture partner is a focal firm that creates and owns a new legal entity through equity investment or pooling of assets. The other options do not accurately describe this type of partnership. A project-based partner typically works on a specific project with the focal firm but does not create a separate legal entity. A build-own-transfer venture involves a company building a particular asset or facility and then transferring ownership to a government entity. A nonequity venture partner does not invest any capital but may provide other resources or expertise to a joint venture.

Question 16

Distribution channel intermediaries ________.

Accepted Answer

Distribution channel intermediaries are responsible for delivering products and services from the focal firm to the end-users in the home country and abroad. They help bridge the gap between the manufacturer and the final consumers by providing services such as warehousing, transportation, and logistics.

Question 17

Project-based partnerships ________.

Accepted Answer

Project-based partnerships are generally short-term ventures that do not involve equity investment in the parent companies. They are focused on specific projects with a defined scope and timeline, rather than long-term collaboration.

Question 18

The increase in the number of international business facilitators has been driven by all of the following EXCEPT ________.

Accepted Answer

The other options have played a role in the increase in the number of international business facilitators, except for declining trade in international services, which would not necessarily lead to an increase in demand for facilitators.

Question 19

Which of the following assist focal firms in resolving disputes with foreign business partners?

Accepted Answer

Trade lawyers specialize in international law and can assist focal firms in resolving disputes with foreign business partners by providing legal advice and representation.

Question 20

________ specialize in international construction, engineering, design, and architectural projects, usually for airports, hospitals, factories, power plants, oil refineries, campuses, and upgrades to public transportation such as bridges, roadways, and rail systems.

Accepted Answer

Turnkey contractors specialize in managing large construction, engineering, design, and architectural projects, often in international settings. They oversee every aspect of a project, from the initial design stages to the final construction and handover. The types of projects typically undertaken by turnkey contractors include airports, hospitals, factories, power plants, and oil refineries, as well as upgrades to public transportation infrastructure like bridges, roadways, and rail systems.

Quiz 3: Organizational Participants That Make International Business Happen