Question 1

Which of the following is true of price quotations for international sale?

Accepted Answer

A)  Price quotations can be made only if it is shown that prices are lower in the importing country than in the exporting country. 
B)  Price quotations must specify the currency to be used and the credit terms of the transaction. 
C)  The price quotation and contract should define only the quantity of goods and not necessarily the quality. 
D)  Price quotations must be quoted only in terms of electronic trade dollars. 
E)  Price quotations need to specify the transportation charges but need not necessarily state what type of documentation needs to be used. 
A)  Price quotations can be made only if it is shown that prices are lower in the importing country than in the exporting country. 
B)  Price quotations must specify the currency to be used and the credit terms of the transaction. 
C)  The price quotation and contract should define only the quantity of goods and not necessarily the quality. 
D)  Price quotations must be quoted only in terms of electronic trade dollars. 
E)  Price quotations need to specify the transportation charges but need not necessarily state what type of documentation needs to be used.

Question 2

The portion of international business handled on a cash-in-advance basis is not large and this is typically used when credit is doubtful.

Accepted Answer

A) True 
 B)False

Question 3

What do barter houses do?

Accepted Answer

A)  They specialize in trading goods acquired through barter arrangements. 
B)  They negotiate barter arrangements with countries that accept the U.S. currency as a countertrade. 
C)  They specialize in bartering with third countries for unused raw material. 
D)  They direct bartered goods to the World Trade Organization for its approval. 
E)  They review disputes in barter arrangements at the request of the International Court of Justice. 
A)  They specialize in trading goods acquired through barter arrangements. 
B)  They negotiate barter arrangements with countries that accept the U.S. currency as a countertrade. 
C)  They specialize in bartering with third countries for unused raw material. 
D)  They direct bartered goods to the World Trade Organization for its approval. 
E)  They review disputes in barter arrangements at the request of the International Court of Justice.

Question 4

_____ is the typical payment procedure for established customers where the goods are delivered and the customer is billed on an end-of-the-month basis.

Accepted Answer

A)  An open account 
B)  A letter of credit 
C)  A bill of exchange 
D)  Cash in advance 
E)  Forfaiting 
A)  An open account 
B)  A letter of credit 
C)  A bill of exchange 
D)  Cash in advance 
E)  Forfaiting

Question 5

One approach to defining the pricing policy of dumping is to say that it is a case where a product is sold in the international market:

Accepted Answer

A)  at a price below the cost of production. 
B)  only to the premium, price insensitive segment of the market. 
C)  where the demand for the product is lower than in the domestic market. 
D)  at a higher price than in the domestic market. 
E)  at the same price as in the domestic market. 
A)  at a price below the cost of production. 
B)  only to the premium, price insensitive segment of the market. 
C)  where the demand for the product is lower than in the domestic market. 
D)  at a higher price than in the domestic market. 
E)  at the same price as in the domestic market.

Question 6

_____ is a practical approach to pricing when a company has high fixed costs and unused production capacity.

Accepted Answer

A)  Full-cost pricing 
B)  Cost-plus pricing 
C)  Marginal-cost pricing 
D)  Demand-based pricing 
E)  Premium pricing 
A)  Full-cost pricing 
B)  Cost-plus pricing 
C)  Marginal-cost pricing 
D)  Demand-based pricing 
E)  Premium pricing

Question 7

Countertrading does not benefit countries that face a shortage of hard currencies with which to trade.

Accepted Answer

A) True 
 B)False

Question 8

Deflation results in ever-decreasing prices, creating a positive result for consumers, but both put pressure to lower costs on everyone in the supply chain.

Accepted Answer

A) True 
 B)False

Question 9

An irrevocable, confirmed letter of credit means that a U.S. bank accepts responsibility to pay the seller regardless of the financial situation of the buyer or foreign bank.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is true of free trade zones (FTZs)?

Accepted Answer

A)  In an FTZ, payment of import duties is postponed until the product leaves the FTZ area and enters the host country. 
B)  FTZs operate throughout the world, replacing imported goods with domestic goods. 
C)  An FTZ is, in essence, a taxable enclave and considered part of the country as far as import regulations are concerned. 
D)  An FTZ benefits export companies but does not offer any advantages to an importer. 
E)  The utilization of FTZs typically increases taxes, duties, surcharges, and freight charges on imported goods. 
A)  In an FTZ, payment of import duties is postponed until the product leaves the FTZ area and enters the host country. 
B)  FTZs operate throughout the world, replacing imported goods with domestic goods. 
C)  An FTZ is, in essence, a taxable enclave and considered part of the country as far as import regulations are concerned. 
D)  An FTZ benefits export companies but does not offer any advantages to an importer. 
E)  The utilization of FTZs typically increases taxes, duties, surcharges, and freight charges on imported goods.

Question 11

Eliminating costly functional features or lowering overall product quality can minimize price escalation.

Accepted Answer

A) True 
 B)False

Question 12

The possibility of a parallel market occurs whenever price differences are less than the cost of transportation between two markets.

Accepted Answer

A) True 
 B)False

Question 13

What are the essential features required while making price quotations?

Accepted Answer

In quoting the price of goods for intern

Question 14

The use of countertrade in international trade:

Accepted Answer

A)  allows trade with countries short of hard currency. 
B)  reduces a firm's competitive advantage. 
C)  increases the tax liabilities of trading firms. 
D)  leads to a loss of revenue. 
E)  is considered unethical. 
A)  allows trade with countries short of hard currency. 
B)  reduces a firm's competitive advantage. 
C)  increases the tax liabilities of trading firms. 
D)  leads to a loss of revenue. 
E)  is considered unethical.

Question 15

The crucial problem confronting a seller in a countertrade negotiation is determining the _____ for the goods offered as payment.

Accepted Answer

A)  delivery method 
B)  warranties 
C)  insurance premiums 
D)  potential demand 
E)  the cost 
A)  delivery method 
B)  warranties 
C)  insurance premiums 
D)  potential demand 
E)  the cost

Question 16

In bills of exchange, the buyer assumes all the risk until the payment is made.

Accepted Answer

A) True 
 B)False

Question 17

Except for cash in advance, letters of credit afford the greatest degree of protection for the seller.

Accepted Answer

A) True 
 B)False

Question 18

If the supply of a product in a market is limited, a company may follow a _____ approach to maximize revenue and to match demand to supply.

Accepted Answer

A)  penetration pricing 
B)  psychological pricing 
C)  variable-cost pricing 
D)  predatory pricing 
E)  price skimming 
A)  penetration pricing 
B)  psychological pricing 
C)  variable-cost pricing 
D)  predatory pricing 
E)  price skimming

Question 19

Administered pricing is an attempt to establish prices for an entire market.

Accepted Answer

A) True 
 B)False

Question 20

Explain the concept of administered pricing.

Accepted Answer

Administered pricing is an attempt to es

Which of the following is true of price quotations for international sale?

The portion of international business handled on a cash-in-advance basis is not large and this is typically used when credit is doubtful.

What do barter houses do?

_____ is the typical payment procedure for established customers where the goods are delivered and the customer is billed on an end-of-the-month basis.

One approach to defining the pricing policy of dumping is to say that it is a case where a product is sold in the international market:

_____ is a practical approach to pricing when a company has high fixed costs and unused production capacity.

Countertrading does not benefit countries that face a shortage of hard currencies with which to trade.

Deflation results in ever-decreasing prices, creating a positive result for consumers, but both put pressure to lower costs on everyone in the supply chain.

An irrevocable, confirmed letter of credit means that a U.S. bank accepts responsibility to pay the seller regardless of the financial situation of the buyer or foreign bank.

Which of the following is true of free trade zones (FTZs)?

Eliminating costly functional features or lowering overall product quality can minimize price escalation.

The possibility of a parallel market occurs whenever price differences are less than the cost of transportation between two markets.

What are the essential features required while making price quotations?

The use of countertrade in international trade:

The crucial problem confronting a seller in a countertrade negotiation is determining the _____ for the goods offered as payment.

In bills of exchange, the buyer assumes all the risk until the payment is made.

Except for cash in advance, letters of credit afford the greatest degree of protection for the seller.

If the supply of a product in a market is limited, a company may follow a _____ approach to maximize revenue and to match demand to supply.

Administered pricing is an attempt to establish prices for an entire market.

Explain the concept of administered pricing.

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

Which of the following is true of price quotations for international sale?

The portion of international business handled on a cash-in-advance basis is not large and this is typically used when credit is doubtful.

What do barter houses do?

_____ is the typical payment procedure for established customers where the goods are delivered and the customer is billed on an end-of-the-month basis.

One approach to defining the pricing policy of dumping is to say that it is a case where a product is sold in the international market:

_____ is a practical approach to pricing when a company has high fixed costs and unused production capacity.

Countertrading does not benefit countries that face a shortage of hard currencies with which to trade.

Deflation results in ever-decreasing prices, creating a positive result for consumers, but both put pressure to lower costs on everyone in the supply chain.

An irrevocable, confirmed letter of credit means that a U.S. bank accepts responsibility to pay the seller regardless of the financial situation of the buyer or foreign bank.

Which of the following is true of free trade zones (FTZs)?

Eliminating costly functional features or lowering overall product quality can minimize price escalation.

The possibility of a parallel market occurs whenever price differences are less than the cost of transportation between two markets.

What are the essential features required while making price quotations?

The use of countertrade in international trade:

The crucial problem confronting a seller in a countertrade negotiation is determining the _____ for the goods offered as payment.

In bills of exchange, the buyer assumes all the risk until the payment is made.

Except for cash in advance, letters of credit afford the greatest degree of protection for the seller.

If the supply of a product in a market is limited, a company may follow a _____ approach to maximize revenue and to match demand to supply.

Administered pricing is an attempt to establish prices for an entire market.

Explain the concept of administered pricing.

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