Question 1

Barter houses help countries negotiate prices for imports and exports and also provide facilities for cash payments and receipts.

Accepted Answer

A) True 
 B)False

Question 2

Sales on open accounts are recommended when shipping is hazardous.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is an example of a price-fixing arrangement?

Accepted Answer

A)  Price escalation 
B)  Barter houses 
C)  Letters of credit 
D)  Cartels 
E)  Countertrade 
A)  Price escalation 
B)  Barter houses 
C)  Letters of credit 
D)  Cartels 
E)  Countertrade

Question 4

The costs of production may be lowered if a firm ships unassembled goods to a free trade zone (FTZ) in an importing country because:

Accepted Answer

A)  wages and other overheads may be higher in an FTZ. 
B)  locally produced components do not qualify for tariffs. 
C)  unassembled goods may qualify for lower freight rates. 
D)  the finished goods cannot be exported to other countries. 
E)  goods imported in an FTZ qualify for the same level of tariffs as other imported goods. 
A)  wages and other overheads may be higher in an FTZ. 
B)  locally produced components do not qualify for tariffs. 
C)  unassembled goods may qualify for lower freight rates. 
D)  the finished goods cannot be exported to other countries. 
E)  goods imported in an FTZ qualify for the same level of tariffs as other imported goods.

Question 5

Companies should use the full-cost pricing approach when it has high fixed costs relative to its variable costs.

Accepted Answer

A) True 
 B)False

Question 6

A(n) _____ is a flat charge per physical unit imported.

Accepted Answer

A)  ad valorem duty 
B)  compound duty 
C)  prohibitive duty 
D)  alternative duty 
E)  specific duty 
A)  ad valorem duty 
B)  compound duty 
C)  prohibitive duty 
D)  alternative duty 
E)  specific duty

Question 7

_____ are the primary discriminatory tax that must be taken into account in reckoning with foreign competition.

Accepted Answer

A)  Transfer taxes 
B)  Tariffs 
C)  Tolls 
D)  Excise taxes 
E)  Inflation taxes 
A)  Transfer taxes 
B)  Tariffs 
C)  Tolls 
D)  Excise taxes 
E)  Inflation taxes

Question 8

Which of the following characterizes the variable-cost pricing approach?

Accepted Answer

A)  In this approach, prices are often set on a cost-plus basis, that is, total costs plus a profit margin. 
B)  This approach insists that no unit of a similar product is different from any other unit in terms of cost. 
C)  This approach insists that each unit must bear its full share of the total fixed and variable cost. 
D)  This approach is suitable when a company has high variable costs relative to its fixed costs. 
E)  In this approach, any contribution to fixed cost after variable costs are covered is profit to the company. 
A)  In this approach, prices are often set on a cost-plus basis, that is, total costs plus a profit margin. 
B)  This approach insists that no unit of a similar product is different from any other unit in terms of cost. 
C)  This approach insists that each unit must bear its full share of the total fixed and variable cost. 
D)  This approach is suitable when a company has high variable costs relative to its fixed costs. 
E)  In this approach, any contribution to fixed cost after variable costs are covered is profit to the company.

Question 9

A company uses _____ when the objective is to reach a segment of the market that is relatively price insensitive and thus willing to pay a premium price for the value received.

Accepted Answer

A)  penetration pricing 
B)  everyday low pricing 
C)  predatory pricing 
D)  price skimming 
E)  psychological pricing 
A)  penetration pricing 
B)  everyday low pricing 
C)  predatory pricing 
D)  price skimming 
E)  psychological pricing

Question 10

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

Accepted Answer

A tariff, or duty, is a special form of

Question 11

The international marketer must rely on experience and marketing research to ascertain middleman costs because no convenient source of data on middleman costs is available.

Accepted Answer

A) True 
 B)False

Question 12

A marketer may face lower costs by shipping unassembled goods to a free trade zone (FTZ) in an importing country because:

Accepted Answer

A)  locally produced components may not be used in production. 
B)  wages may be lower in the importing country. 
C)  FTZs levy higher taxes and surcharges on imported goods. 
D)  ocean transportation rates may not be affected by the weight and volume of the components. 
E)  duties may be assessed at a higher rate for unassembled goods. 
A)  locally produced components may not be used in production. 
B)  wages may be lower in the importing country. 
C)  FTZs levy higher taxes and surcharges on imported goods. 
D)  ocean transportation rates may not be affected by the weight and volume of the components. 
E)  duties may be assessed at a higher rate for unassembled goods.

Question 13

In a deflationary market, in order to win the trust of consumers, it is essential for a company to:

Accepted Answer

A)  engage in forfaiting agreements with consumers. 
B)  spend more on advertising and stall the production of products. 
C)  allow prices to escalate and target the price insensitive segment of the market. 
D)  keep prices low and raise brand value. 
E)  form a cartel to control the dynamics of the market. 
A)  engage in forfaiting agreements with consumers. 
B)  spend more on advertising and stall the production of products. 
C)  allow prices to escalate and target the price insensitive segment of the market. 
D)  keep prices low and raise brand value. 
E)  form a cartel to control the dynamics of the market.

Question 14

The creation of a free trade zone leads to:

Accepted Answer

A)  a decline in exports. 
B)  an increase in taxes and duties levied on a product. 
C)  a reduction in the price escalation. 
D)  a decline in imports. 
E)  an increase in labor costs and overheads. 
A)  a decline in exports. 
B)  an increase in taxes and duties levied on a product. 
C)  a reduction in the price escalation. 
D)  a decline in imports. 
E)  an increase in labor costs and overheads.

Question 15

Assuming that an international marketer has produced the right product, used the proper channel of distribution, and promoted the goods correctly, the effort is most likely to fail if the international marketer fails to:

Accepted Answer

A)  inform the host government about all its marketing objectives. 
B)  set the right price for the goods or services. 
C)  set the import tariff for the goods or services. 
D)  form a joint venture in order to sell the product. 
E)  work on a franchise basis in the country. 
A)  inform the host government about all its marketing objectives. 
B)  set the right price for the goods or services. 
C)  set the import tariff for the goods or services. 
D)  form a joint venture in order to sell the product. 
E)  work on a franchise basis in the country.

Question 16

Letters of credit shift the buyer's credit risk to the bank issuing the letter of credit.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is true of international currencies?

Accepted Answer

A)  Exchange rate volatility index can be used to accurately predict the value of any currency. 
B)  The value of all currencies is set by the World Trade Organization. 
C)  All major currencies are floating freely relative to one another. 
D)  All currencies are fully backed by gold reserves. 
E)  The World Bank mandates a fixed exchange rate regime. 
A)  Exchange rate volatility index can be used to accurately predict the value of any currency. 
B)  The value of all currencies is set by the World Trade Organization. 
C)  All major currencies are floating freely relative to one another. 
D)  All currencies are fully backed by gold reserves. 
E)  The World Bank mandates a fixed exchange rate regime.

Question 18

When the value of the dollar is weak relative to the buyer's currency, sellers generally employ _____.

Accepted Answer

A)  competition-based pricing 
B)  demand-based pricing 
C)  premium pricing 
D)  psychological pricing 
E)  cost-plus pricing 
A)  competition-based pricing 
B)  demand-based pricing 
C)  premium pricing 
D)  psychological pricing 
E)  cost-plus pricing

Question 19

What is price escalation? Explain.

Accepted Answer

Excess profits exist in some internation

Question 20

Which of the following leaves sellers in a position where most of the problems of international commercial finance work to their disadvantage?

Accepted Answer

A)  Letters of credit 
B)  Dollar drafts 
C)  Forfaiting contracts 
D)  Cash in advance agreements 
E)  Open accounts 
A)  Letters of credit 
B)  Dollar drafts 
C)  Forfaiting contracts 
D)  Cash in advance agreements 
E)  Open accounts

Barter houses help countries negotiate prices for imports and exports and also provide facilities for cash payments and receipts.

Sales on open accounts are recommended when shipping is hazardous.

Which of the following is an example of a price-fixing arrangement?

The costs of production may be lowered if a firm ships unassembled goods to a free trade zone (FTZ) in an importing country because:

Companies should use the full-cost pricing approach when it has high fixed costs relative to its variable costs.

A(n) _____ is a flat charge per physical unit imported.

_____ are the primary discriminatory tax that must be taken into account in reckoning with foreign competition.

Which of the following characterizes the variable-cost pricing approach?

A company uses _____ when the objective is to reach a segment of the market that is relatively price insensitive and thus willing to pay a premium price for the value received.

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

The international marketer must rely on experience and marketing research to ascertain middleman costs because no convenient source of data on middleman costs is available.

A marketer may face lower costs by shipping unassembled goods to a free trade zone (FTZ) in an importing country because:

In a deflationary market, in order to win the trust of consumers, it is essential for a company to:

The creation of a free trade zone leads to:

Assuming that an international marketer has produced the right product, used the proper channel of distribution, and promoted the goods correctly, the effort is most likely to fail if the international marketer fails to:

Letters of credit shift the buyer's credit risk to the bank issuing the letter of credit.

Which of the following is true of international currencies?

When the value of the dollar is weak relative to the buyer's currency, sellers generally employ _____.

What is price escalation? Explain.

Which of the following leaves sellers in a position where most of the problems of international commercial finance work to their disadvantage?

The Scope and Challenge of International Marketing

The Dynamic Environment of International Trade

History and Geography: The Foundations of Culture

Cultural Dynamics in Assessing Global Markets

Culture, Management Style, and Business Systems

The Political Environment: a Critical Concern

The International Legal Environment: Playing by the Rules

Developing a Global Vision Through Marketing Research

Economic Development and the Americas

Europe, Africa, and the Middle East

The Asia Pacific Region

Global Marketing Management: Planning and Organization

Products and Services for Consumers

Products and Services for Businesses

International Marketing Channels

Integrated Marketing Communications and International Advertising

Personal Selling and Sales Management

Inventive Negotiations With International Customers, Partners, and Regulators

Filters

Exam 18: Pricing for International Markets

Barter houses help countries negotiate prices for imports and exports and also provide facilities for cash payments and receipts.

Sales on open accounts are recommended when shipping is hazardous.

Which of the following is an example of a price-fixing arrangement?

The costs of production may be lowered if a firm ships unassembled goods to a free trade zone (FTZ) in an importing country because:

Companies should use the full-cost pricing approach when it has high fixed costs relative to its variable costs.

A(n) _____ is a flat charge per physical unit imported.

_____ are the primary discriminatory tax that must be taken into account in reckoning with foreign competition.

Which of the following characterizes the variable-cost pricing approach?

A company uses _____ when the objective is to reach a segment of the market that is relatively price insensitive and thus willing to pay a premium price for the value received.

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

The international marketer must rely on experience and marketing research to ascertain middleman costs because no convenient source of data on middleman costs is available.

A marketer may face lower costs by shipping unassembled goods to a free trade zone (FTZ) in an importing country because:

In a deflationary market, in order to win the trust of consumers, it is essential for a company to:

The creation of a free trade zone leads to:

Assuming that an international marketer has produced the right product, used the proper channel of distribution, and promoted the goods correctly, the effort is most likely to fail if the international marketer fails to:

Letters of credit shift the buyer's credit risk to the bank issuing the letter of credit.

Which of the following is true of international currencies?

When the value of the dollar is weak relative to the buyer's currency, sellers generally employ _____.

What is price escalation? Explain.

Which of the following leaves sellers in a position where most of the problems of international commercial finance work to their disadvantage?

The Scope and Challenge of International Marketing

The Dynamic Environment of International Trade

History and Geography: The Foundations of Culture

Cultural Dynamics in Assessing Global Markets

Culture, Management Style, and Business Systems

The Political Environment: a Critical Concern

The International Legal Environment: Playing by the Rules

Developing a Global Vision Through Marketing Research

Economic Development and the Americas

Europe, Africa, and the Middle East

The Asia Pacific Region

Global Marketing Management: Planning and Organization

Products and Services for Consumers

Products and Services for Businesses

International Marketing Channels

Integrated Marketing Communications and International Advertising

Personal Selling and Sales Management

Inventive Negotiations With International Customers, Partners, and Regulators

Filters