54) Which statement is true regarding independent agents?
A) They represent one firm at a time.
B) They usually specialize in a particular product.
C) They act as sales representatives.
D) They are usually based at domestic offices.
E) They do not monitor or address customer satisfaction.
55) Which of the following provides exclusive rights to produce a product for another firm?
A) Licensing arrangement
B) Strategic alliance
C) Foreign direct investment
D) Independent agent
E) Branch office
56) Which of the following types of payments are usually received by an exporter as an ongoing
payment calculated as a percentage of the license holder’s sales?
A) Flat fees
B) Royalties
C) Agent fees
D) Subsidies
E) Direct investments
57) In which international organization structure does a firm have greatest control over foreign
activities?
A) Exporting arrangements
B) Strategic alliances
C) Importing arrangements
D) Licensing arrangements
E) Independent agents
58) What is a difference between an international firm and a multinational firm?
A) Multinational firms design, produce, and market products in many nations, whereas
international firms are based primarily in one nation.
B) International firms design, produce, and market products in many nations, whereas
multinational firms are based primarily in one nation.
C) International and multinational firms are the same thing.
D) Multinational firms are concerned primarily with foreign markets, whereas international firms
are concerned primarily with the domestic market.
E) International firms are concerned primarily with foreign markets, whereas multinational firms
are concerned primarily with the domestic market.
59) The practice of using suppliers in foreign countries to perform business processes that were
previously done in the United States is called
A) licensing.
B) adapting.
C) offshoring.
D) exporting.
E) importing.
60) What is the advantage for a business that uses offshoring in their manufacturing process?
A) Decreased costs
B) Improved quality
C) Decreased production time
D) Increased employee moral
E) Decreased employee turnover
61) Which of the following allows firms to focus on core activities and reduce cost by moving
aspects of the business to areas where costs are low?
A) Outsourcing
B) Adapting
C) Licensing
D) Exporting
E) Importing
62) In a licensing arrangement, firms give organizations exclusive rights to manufacture their
products in another country in return for a fee plus royalties.
63) Transportation costs have relatively little impact on a domestic firm’s decision to go
international when compared to other possible factors.
64) International firms conduct a good deal of their business abroad and may even maintain
overseas manufacturing facilities.
65) If you have given another company in another country the right to produce your company’s
product, you are engaging in a licensing arrangement.
66) Strategic alliances give firms greater control over foreign activities than do agents and
licensees.
67) A company with high demand for its product in a particular foreign market that is associated
with high transportation costs would tend to arrange a strategic alliance over any other
international organization structure.
68) When working with international partners, the terms outsourcing and offshoring are often
used interchangeably.
69) What are three basic levels of involvement available for a firm that decides to conduct
business internationally?
70) Explain how a firm may have more direct control with a branch office than it does over
agents or license holders.
71) Define licensing arrangement and strategic alliance and discuss their relative merits.
72) What are two specific reasons why a company might decide NOT to conduct business
internationally?
73) What is the shared system of symbols, beliefs, and values of a country known as?
A) Organizational structure
B) Culture
C) Rules
D) Norms
E) Leadership
74) Which of the following indicates the belief people hold about differences in hierarchies and
authority in an organization?
A) Individualism
B) Social orientation
C) Collectivism
D) Power orientation
E) Uncertainty orientation
75) Those cultures that place a higher value on social relationship, quality of life, and concern for
others instead of money and assertiveness have which type of orientation behavior?
A) Uncertainty avoidance
B) Aggressive goal
C) Time
D) Passive goal
E) Power tolerance
76) Which of the following is a person’s belief about the importance of an individual compared
to the importance of a group?
A) Social orientation
B) Power orientation
C) Uncertainty orientation
D) Goal orientation
E) Time orientation
77) What type of societies tends to prefer reward systems that link pay with performance of
individual employees?
A) Collectivist
B) Power respect
C) Power tolerance
D) Uncertainty avoidance
E) Individualistic
78) Which of the following is an indication that people accept the authority of superiors simply
because of their position in the organization?
A) Power respect
B) Power tolerance
C) Power acceptance
D) Power uncertainty
E) Uncertainty avoidance
79) Cultural values and beliefs are often unspoken.
80) Discuss the five dimensions of social behavior that differ across cultures.
81) In some South American countries, it is sometimes legal to bribe other businesses and
government officials, while this practice is illegal in the United States. Which of the following
refers to this type of policy?
A) Protectionism
B) Business practice laws
C) Free trade agreements
D) Fair trade agreements
E) Local content laws
82) China and India require that when foreign firms enter into joint ventures with local firms, the
local partners must have the controlling ownership stake. What is this an example of?
A) Local content laws
B) Business practice laws
C) Fair trade agreements
D) Quotas
E) Subsidies
83) In Germany, Walmart has been required to buy existing retailers rather than open brand-new
stores. What does this illustrate?
A) Local content laws
B) Fair trade agreements
C) Free trade agreements
D) Licensing arrangements
E) Business practice laws
84) Which of the following denotes a government order forbidding exportation and/or
importation of a particular product from a particular country?
A) Tariff
B) Embargo
C) Subsidy
D) Local content law
E) Business practice law
85) Which of the following is a government payment to help a domestic business compete with
foreign firms?
A) Revenue tariff
B) Protectionist tariff
C) Import buy-back
D) Export rebate
E) Subsidy
86) Which of the following denotes the practice of protecting domestic business at the expense
of free market competition?
A) Fair trade
B) Balanced trade
C) Free trade
D) Market liberalism
E) Protectionism
87) Many governments require that products sold in their particular country be at least partly
made there. This policy involves what type of laws?
A) Quota laws
B) Local content laws
C) Business practice laws
D) Free trade laws
E) Subsidy laws
88) Which of the following refers to associations of producers that control supply and prices?
A) Independent agencies
B) Cartels
C) Trade alliances
D) Multinational firms
E) Trade monopolies
89) Which of the following refers to the practice of selling a product abroad for less than the cost
of production?
A) Exporting
B) Importing
C) Dumping
D) Safeguarding
E) Offshoring
90) Which of the following refers to tariffs that are imposed strictly to raise money for the
government?
A) Revenue tariffs
B) Protectionist tariffs
C) Quota tariffs
D) Subsidy tariffs
E) Labor tariffs
91) Which of the following types of tariff is meant to discourage the import of particular
products?
A) Revenue tariff
B) Quota tariff
C) Labor tariff
D) Subsidy tariff
E) Protectionist tariff
92) Suppose the United States requires products sold in the United States be at least 51 percent
made in the United States. Which of the following denotes this type of policy?
A) Business practice law
B) Deregulation law
C) Antidumping laws
D) Strategic alliance
E) Local content law
93) Which of the following goals is a primary purpose of tariffs on imports?
A) Maintain domestic competitiveness
B) Decrease exports
C) Increase imports
D) Subsidize domestic industry
E) Promote free trade
94) Which of the following statements BEST describes the effects of subsidies?
A) A subsidy essentially lowers the prices of foreign goods rather than raising the prices of
domestic goods.
B) A subsidy essentially raises the prices of domestic goods rather than lowering the prices of
foreign goods.
C) A subsidy essentially lowers the prices of domestic goods rather than raising the prices of
foreign goods.
D) A subsidy essentially raises the prices of foreign goods while also raising the prices of
domestic goods.
E) A subsidy essentially lowers the prices of foreign goods while also lowering the prices of
domestic goods.
95) Which of the following directly affects the price and quantity of foreign-made products in a
country by restricting the amount of product that can be imported?
A) Local content law
B) Quotas
C) Cartels
D) Subsidies
E) Protectionism
96) Which of the following represents the controversial practice of supporting domestic
businesses at the expense of free market competition?
A) Embargos
B) Quotas and tariffs
C) Protectionism
D) Local content law
E) Cartels
97) Even free market economies often establish some system of quotas and/or tariffs.
98) A subsidy is a tax designed to help companies who import products.
99) Local content laws guarantee that products sold in a country are at least partly made there.
100) Revenue tariffs are primarily designed to discourage the importation of foreign products.
101) Critics of protectionism charge that it drives up prices by reducing competition.
102) A Chinese steel company cannot charge less for its product in the United States than the
cost of production.
103) Under U.S. antidumping legislation, what conditions must be met to prove that dumping is
being practiced?
104) How can a local content law in a country act as a barrier to a U.S.-based automobile
manufacturing company that is interested in setting up a branch office in that country?
105) What are the advantages and disadvantages of globalization?