Question 1

Which of the following is an example of a nontariff trade barrier?

Accepted Answer

A)  a sales tax
B)  customs duty
C)  a host-country regulation
D)  excise duty
E)  an import quota C

Question 2

What type of transactions do most international trade involve?

Accepted Answer

A)  cash
B)  cheques
C)  credit
D)  IOUs
E)  virtual banking accounts A

Question 3

Which of the following best characterizes a global firm?

Accepted Answer

A)  A global firm typically operates from one country.
B)  A global firm engages in joint partnerships overseas.
C)  A global firm sees the world as many different markets.
D)  A global firm maximizes the importance of national boundaries.
E)  A global firm manufactures and markets goods wherever it can do the best job. E

Question 4

________ ventures consist of one company collaborating with foreign investors to create a local business in which they share possession and control.

Accepted Answer

A)  Licensing
B)  Direct investment
C)  Contract manufacturing
D)  Management contracting
E)  Joint ownership

Question 5

When companies fully adapt their advertising messages to local markets, they follow a strategy of ________.

Accepted Answer

A)  communication extension
B)  product invention
C)  communication adaptation
D)  straight product extension
E)  product adaptation

Question 6

I Design is a small Romanian designer and manufacturer of recyclable bags for women. The concept is simple: a customer buys the body of the bag, the straps, and the interior lining separately. Each component comes in several materials and colours, giving customers the option of customizing their bag and of making more than one look with the same body but different straps and interiors. Young customers really liked the concept!

At first, the bags were only available in the Transylvanian hometown of the designer, Clij. Alexandreina was a graduate of the Art School and started her own small company. She found local manufacturers of the component parts and had them delivered to the back of her shop. There she assembled some examples for customers to see.

Not long after opening her shop to local customers, people would telephone from Bucharest to find out how to buy the bag. They had seen people walking around with the bag and asked where they could get one. Alexandreina had to create a secure website where nonlocal customers could purchase the bag.

Before long, she was receiving requests from all over western Europe, the United States, and even Brazil! This was good news but admittedly, Alexandreina was starting to feel a little overwhelmed and knew she would have to make some major decisions. She thought about opening additional shops in several European cities.

-What are the factors Alexandreina needs to consider before going global?

Accepted Answer

The answer of I Design is a small Romanian designer...

Question 7

Explain the whole-channel view of the distribution process.

Accepted Answer

The answer of Explain the whole-channel view of the distribution...

Question 8

A tax on an imported product designed to raise revenue or protect domestic firms is referred to as a(n)________.

Accepted Answer

A)  exchange
B)  excise
C)  fine
D)  quota
E)  tariff

Question 9

To overcome the problem of price escalation when selling to less-affluent consumers in developing countries, many companies make simpler or smaller versions of their products that can be sold at lower prices.

Accepted Answer

A) True 
 B)False

Question 10

Botsford, a U.S. firm, builds automotive transmissions in its manufacturing facility in Taiwan to capitalize on the availability of cheap labor. Botsford's involvement in foreign markets is most likely through ________.

Accepted Answer

A)  joint ownership
B)  direct investment
C)  management contracting
D)  contract manufacturing
E)  indirect exporting

Question 11

A country's industrial structure is an economic factor that reflects its attractiveness as a market.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is most likely a benefit of contract manufacturing?

Accepted Answer

A)  Investing companies have complete control over the foreign manufacturer's processes.
B)  Investing companies gain significant profits from handling the manufacturing of products.
C)  Investing companies that are new entrants in international markets get a chance to start faster.
D)  Investing companies provide new jobs in their home countries by developing manufacturing facilities.
E)  Investing companies do not require the services of an overseas marketing organization or network.

Question 13

________ means marketing a product in a foreign market without making any changes to the product.

Accepted Answer

A)  Product adaptation
B)  Straight product extension
C)  Communication extension
D)  Product invention
E)  Communication adaptation

Question 14

Direct investment involves fewer changes in a company's product lines, organization, investments, or mission as compared to exporting.

Accepted Answer

A) True 
 B)False

Question 15

Japanese and Asian business people find fast, tough face-to-face bargaining ________.

Accepted Answer

A)  normal
B)  offensive
C)  annoying
D)  silly
E)  necessary

Question 16

Which of the following is a disadvantage of licensing?

Accepted Answer

A)  The licensing company gains entry into a foreign market at a high risk.
B)  It takes a lot of time for the licensee to gain production expertise and name.
C)  Licensing is a complex way for a manufacturer to enter international marketing.
D)  The licensor potentially creates a competitor in the form of the licensee.
E)  The licensee is restricted from gaining knowledge about the licensor's intellectual property.

Question 17

Management contracting is an unwise choice if a domestic firm can make greater profits by undertaking a whole venture.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements is true of industrial economies?

Accepted Answer

A)  They export their goods to other types of economies for raw materials.
B)  They have a declining middle class population.
C)  They depend on agriculture as the primary revenue generator.
D)  They do not trade goods amongst themselves.
E)  They consume most of their output and barter the rest for simple goods and services.

Question 19

Which of the following is true about joint venturing?

Accepted Answer

A)  Management contracting is highly risky for the domestic firm.
B)  Contract manufacturing gives significant control to the domestic firm.
C)  Licensing is a highly complex method for entering global markets.
D)  A host country partner is necessary for selling or marketing products.
E)  Companies are required to invest in the construction of foreign-based facilities.

Question 20

Regardless of how companies go about pricing their products, their foreign prices probably will be higher than their domestic prices for comparable products. This is known as the ________ problem.

Accepted Answer

A)  price escalation
B)  demand escalation
C)  inflation
D)  skimming price
E)  deflation

Exam 16: The Global Marketplace

Which of the following is an example of a nontariff trade barrier?

What type of transactions do most international trade involve?

Which of the following best characterizes a global firm?

________ ventures consist of one company collaborating with foreign investors to create a local business in which they share possession and control.

When companies fully adapt their advertising messages to local markets, they follow a strategy of ________.

Explain the whole-channel view of the distribution process.

A tax on an imported product designed to raise revenue or protect domestic firms is referred to as a(n) ________.

To overcome the problem of price escalation when selling to less-affluent consumers in developing countries, many companies make simpler or smaller versions of their products that can be sold at lower prices.

Botsford, a U.S. firm, builds automotive transmissions in its manufacturing facility in Taiwan to capitalize on the availability of cheap labor. Botsford's involvement in foreign markets is most likely through ________.

A country's industrial structure is an economic factor that reflects its attractiveness as a market.

Which of the following is most likely a benefit of contract manufacturing?

________ means marketing a product in a foreign market without making any changes to the product.

Direct investment involves fewer changes in a company's product lines, organization, investments, or mission as compared to exporting.

Japanese and Asian business people find fast, tough face-to-face bargaining ________.

Which of the following is a disadvantage of licensing?

Management contracting is an unwise choice if a domestic firm can make greater profits by undertaking a whole venture.

Which of the following statements is true of industrial economies?

Which of the following is true about joint venturing?

Regardless of how companies go about pricing their products, their foreign prices probably will be higher than their domestic prices for comparable products. This is known as the ________ problem.