Industry data cannot indicate how individuals feel about a company or its products.
Switch trading is the export of industrial equipment in return for products produced by
that equipment.
The major purpose of foreign trade zones is to implement barriers to trade and
commerce.
Literacy tests offer a reliable basis on which one nation’s educational level can be
compared with another.
Emerging markets typically have fewer forms of mass media for use in implementing a
pull strategy.
Scenario: Global Manufacturing Inc. (GMI)
Global Manufacturing Inc., a fast-growing U.S. company, plans for a production system
in which two components of its product will be manufactured in locations where the
cost of production is lowest. The components will then be taken to maquiladoras for
final assembly. GMI plans to purchase an existing company in Brazil to produce
component A and build a subsidiary in Thailand to produce component B.
Rationalized production is a system of production in which each of a product’s
components is produced in the same location so that the cost of producing that product
is lowest.
The major drawback of polycentric staffing is the potential for losing control of the
host-country operation.
Scenario: Moonland Union
Twenty-six nations of Moonland region, have decided to cooperate with one another to
eliminate trade barriers among them and create the Moonland Union. They are not sure,
however, to what extent they want to cooperate.
The primary purpose of the Gulf Cooperation Council (GCC) at its formation was to
create a political union between Iraq and Iran.
According to the eclectic theory that explains FDI, an ownership advantage is the
advantage that arises from internalizing a business activity rather than leaving it to a
relatively inefficient market.
People in collectivistic cultures are given freedom to focus on personal goals.
Corporate social responsibility is the practice of going beyond legal obligations to
actively balance commitments to investors, customers, other companies, and
communities.
Counterfeiting is common among highly visible brand-name consumer goods.
Scenario: Susan Goes Global with Grape Fizz
Susan is the CEO of Grape Fizz, a global drinks-manufacturing company. She wishes to
set up production facilities in other countries and has been advised to assess the
political system of each country before she does so.
Pluralistic political systems include authoritarian regimes such as communism and
fascism.
________ are imitation products passed off as legitimate trademarks, patents, or
copyrighted works.
A) Giffen goods
B) Counterfeit goods
C) Inferior goods
D) Intangible goods
Scenario: Audio Component Outsourcing
Echo Corporation manufactures high-quality audio components, such as speakers,
amplifiers, and receivers, for home entertainment systems. Echo has been losing market
share in recent years due to the competitive pricing of other audio component
manufacturers that engage in outsourcing. Echo managers are attempting to convince
Nathan Douglas, the firm’s founder and CEO, that outsourcing would enable the firm to
be more competitive without sacrificing quality.
Which of the following most likely supports the argument of Echo managers to
outsource some of the firm’s manufacturing activities?
A) Echo managers could reduce the wages of U.S. based employees and
sub-contractors.
B) Echo could save money by reducing the costs incurred in manufacturing the
component parts.
C) Echo managers could implement a marketing campaign for foreign markets that is
identical to the outsourced firm’s marketing campaign.
D) Echo could merge with one of its U.S.-based competitors to gain a larger market
share.
Which of the following steps of the market screening process involves an evaluation of
the government bureaucracy?
A) identification of basic appeal of a market
B) assessment of the national business environment
C) measurement of market or site potential
D) selection of the market or site
Scenario: Topsy Turvey Toys and Ureshi Toys
Topsy Turvey Toys is a U.S.-based toy retailer that buys all its merchandise from Ureshi
Toys, a Japan-based toy manufacturer with production facilities in twelve nations.
Ureshi Toys markets its toys globally without modification.
The products that Ureshi Toys manufactures are examples of ________.
A) global products
B) niche products
C) intangible products
D) customized products
Foreign bonds issued in the U.S. are called ________.
A) bulldog bonds
B) yankee bonds
C) samurai bonds
D) dragon bonds
Which of the following is a barrier to buying products from international suppliers?
A) extremely low tariffs
B) additional transportation costs
C) lower flexibility to respond to market conditions
D) high political risk
Scenario: Frankfurter Friday
Betty Cleveland is the vice president of Frankfurter Friday, a highly successful hot dog
joint in Oceania. Her company decides to expand to Asia and identifies China as the
ideal market. Before she leaves for China, she studies their culture extensively and
discovers that the number four is considered extremely unlucky, that not everybody is
fluent in China’s official language-Mandarin-and that punctuality is a highly valued trait
in the country.
Which of the following terms describes Betty’s effort to learn more about the Chinese
culture?
A) cultural literacy
B) cultural imperialism
C) cultural divergence
D) cultural heterogeneity
Scenario: Frankfurter Friday
Betty Cleveland is the vice president of Frankfurter Friday, a highly successful hot dog
joint in Oceania. Her company decides to expand to Asia and identifies China as the
ideal market. Before she leaves for China, she studies their culture extensively and
discovers that the number four is considered extremely unlucky, that not everybody is
fluent in China’s official language-Mandarin-and that punctuality is a highly valued trait
in the country.
A nation’s cultural boundaries do not always correspond with its political boundaries.
________ is crucial in production facilities where nonnative managers supervise local
employees.
A) Ethnocentricism
B) Language proficiency
C) Cultural isolation
D) Individualism
________ markets are characterized by the rural population migrating to cities for
better pay and thus, overloading cities’ infrastructures.
A) Traditional
B) Emerging
C) Virtual
D) Developed
An expanded money supply ________.
A) reduces the cost of borrowing
B) increases interest rates
C) makes it difficult for financial institutions to lend money
D) diminishes entrepreneurial initiatives in a country
Rice imports to a nation under a quota limit of 8,500 tons are charged a tariff of 15
percent. Imports of rice above the quota limit are charged a tariff of 60 percent. This is
an example of a(n) ________.
A) export quota
B) voluntary export restraint
C) ad valorem tariff
D) tariff-quota
Which of the following statements is true of tariffs?
A) Tariffs increase an imported product’s appeal to buyers.
B) Transit tariffs are the most widely-levied tariffs.
C) Ad valorem tariffs are levied as a specific fee for each unit of an imported product.
D) Export tariffs are used by countries when they believe an export’s price is lower than
it should be.
Discuss the factor proportions theory and describe the evidence on this theory.
Explain the Hofstede framework briefly.
Differentiate between GDP and GNP. Briefly discuss the drawbacks of using GDP and
GNP as indicators of economic development.
Compare and contrast the slow progress of the Andean Community and the Economic
Community of West African States (ECOWAS). Why have these trade blocs not been
more successful?
Differentiate between the three types of staffing policies used by international
companies. What are the advantages of each?
When should managers consider decentralized decision making? What type of work
teams might emerge in organizations that practice decentralized decision making?
Briefly explain how companies compensate managers in international markets.
Discuss the standardization versus adaptation decision for managers when considering
production facilities, and describe considerations for managers when acquiring fixed
assets.
Explain the impact of added costs, trade barriers, and investor psychology on the ability
of purchasing power parity (PPP) to predict exchange rates accurately.