Exam 3: Doing Business in Global Markets

A small wine and cheese store in Milwaukee sells dozens of different type of cheese: Bulgarian, French, Danish, Greek, and a domestic from its home state of Wisconsin. The domestic Wisconsin cheese sells for $1.99/pound, while all the others sell for more than $2.99/pound, and the Greek variety is priced at $6.99/pound. The domestic variety is much cheaper because

If a Swiss chocolate firm purchases an American ice cream manufacturer, the American ice cream manufacturer becomes a

A free-trade agreement is likely to result in

If tourists from Norway spend money at Orlando's Island of Adventure theme park, it will increase the U.S.'s unfavorable balance of payments.

Why does it make sense to trade with other nations?

Current trade data shows that the country of Hasalot exports far more to other nations than it imports. Hasalot has

The Tsingtao Brewing company pays a fee to Anheuser-Busch InBev for the right to brew and distribute Budweiser in China. Tsingtao is the licensor and the fee paid is a royalty.

The website for Electricity City noted, "Russia has been a country in which Electricity City has made substantial investments. We are one of the largest foreign companies in Russia, operating multiple businesses, including an equipment fleet with more than 1,500 large units." With physical presence in Russia, Brazil, New Zealand, France, Turkey, Nigeria, Canada, and other countries, Electricity City is an example of a multinational company.

Shortly after graduating college, Roberto took his place in his family's company in Miami. Roberto's father and uncle started a company that buys bauxite, copper, and other minerals from Chile, and brings them into the U.S. Every day, Roberto brokers trades with mines in Chile. The company is in the export business.

One characteristic of an international joint venture is all parties sharing the risk of a major project.

Hasalot is a small nation that has followed protectionist policies for many years. Which of the following would be an example of a nontariff barrier established by Hasalot?

The theory of comparative advantage exists because

Free trade is the movement of goods and services between nations without political or economic barriers.

Sociocultural differences that affect global businesses include customs, language, and religion.

Sovereign wealth funds are investment funds controlled by governments that hold large stakes in foreign companies.

One advantage of licensing as a strategy to enter the global market is the sharing of trade secrets.

Explain and provide at least one example of how legal and regulatory forces impede global trade.

The North American Free Trade Agreement (NAFTA) requires member nations to negotiate uniform trade agreements with nonmember nations.

When entering a foreign market, Mountain Stream Brewery entered into an agreement with a local firm to brew and market Mountain Stream's beer. This is an example of

A form of foreign direct investment, where a domestic company purchases a company in a foreign country to produce a similar product or service, is a