1) small-scale entry allows a firm to learn about a foreign market while limiting the
firm’s exposure to that market.
2) host country citizens that are employed by an mne following an fdi are an example of
an indirect effect of fdi.
3) the systematic risk is the level of diversifiable risk in an economy.
4) a company’s customers can be a primary source of new-product ideas.
5) the relatively low correlation between the movements of stock markets in different
countries reflects that different stock markets are still somewhat segmented from each
other by capital controls.
6) a pure free float is one in which exchange rates are determined by market forces.
7) the goal of market segmentation is to optimize the fit between the purchasing
behavior of consumers in a given segment and the marketing mix, thereby maximizing
sales to that segment.
8) three values central to the confucian system of ethics have very important economic
implications. which of the following is not one among them?
a.loyalty
b.rule-based law
c.reciprocal obligations
d.honesty in dealings with others
9) the united nations’ universal declaration of human rights, related to employment,
upholds all of the following except:
a.just and favorable work conditions
b.equal pay for equal work
c.prohibition of trade unions
d.protection against unemployment
10) the most important aspect of a country’s cultural differences, particularly important
in foodstuffs and beverages, is the impact of:
a.values
b.traditions
c.norms
d.attitudes
11) when jobs are created in local suppliers as a result of the fdi and when jobs are
created because of increased local spending by employees of the mne, the mne has a(n)
_____ effect on employment.
a.direct
b.indirect
c.inward
d.outward
12) a pair of shoes costs £30 in britain. the identical pair costs $45 in the united states.
the exchange rate is £1 = $1.80. in terms of cost of the shoes:
a.the u.s. offers a better deal
b.the deal is the same in both countries
c.britain offers a better deal
d.the u.s. deal is comparatively worse
13) in which of the following combinations of the lessard-lorange model is it possible
that the ending spot exchange rate used to evaluate performance against the budget
might be quite different from the initial spot exchange rate used to translate the budget?
a.ii
b.ie
c.ee
d.pp
14) if a firm can realize location economies by moving production elsewhere, it should
avoid:
a.exporting
b.turnkey contracts
c.licensing
d.wholly owned subsidiaries
15) bolivia, peru, ecuador, columbia, and venezuela are all members of:
a.the eu
b.nafta
c.apec
d.the andean pact
16) even if we relax the assumptions of the simple ricardian model that there are
constant returns to scale and realistically assume diminishing returns to specialization,
it can still be concluded that:
a.the benefits of unrestricted trade do not hold
b.free trade is beneficial but the gains may not be as great as in a constant returns case
c.governments should intervene in the market to bring about a zero-sum game
d.the benefits of free trade are comparatively much less than government-regulated
trade
17) religion may be defined as:
a.routine conventions of everyday life
b.social rules that govern peoples’ actions toward each other
c.shared beliefs and rituals that are concerned with the realm of the sacred
d.a set of moral principles, or values, that are used to guide and shape behavior
18) _____ suggests that when nations trade, each nation may be able to specialize in
producing a narrower range of products than it would in the absence of trade, and
through trade, each nation can simultaneously increase the variety of goods available to
its consumers and lower the costs of those goods.
a.the product life-cycle theory
b.porter’s diamond of competitive advantage
c.new trade theory
d.the theory of comparative advantage
19) mercantilism viewed trade as a(n):
a.zero-sum game
b.economic evil
c.nonessential economic activity
d.threat to a government’s independence
20) which term refers to the metrics used to measure the performance of subunits and
make judgments about how well managers are running those subunits?
a.key processes
b.control systems
c.knowledge networks
d.job assignments
21) when individuals gain knowledge of the most efficient ways to perform particular
tasks, they are saving costs through:
a.location economies
b.value creation effects
c.experience curve effects
d.learning effects
22) when an exporting firm finds that its local agent is also carrying competitors’
products, the firm may switch to a _____ to handle local marketing, sales, and service.
a.wholly owned subsidiary
b.franchising arrangement
c.turnkey operation
d.licensing agreement
23) the price a firm charges for a good or service is typically less than the value placed
on that good or service by the customer. this is because:
a.the customer’s disposable income is significantly higher than what the market
demands
b.the customer captures some of that value in the form of a consumer surplus
c.regulatory mechanisms ensure that the customer is not overcharged for
products/services
d.marketers implement psychological pricing tactics to ensure that customers perceive
the prices to be low
24) consider the firm in terms of a value chain. what is the difference between primary
activities and support activities? provide examples of each.
25) with the help of an example discuss the characteristics of globalization.
26) discuss the utilitarian approach to business ethics. when was this approach
developed? what are its drawbacks?
27) consider the importance of unspoken language. why is it important to be familiar
with the unspoken language of another culture?
28) explain john dunning’s position on fdi. what is the eclectic paradigm?
29) what factors affect the success of a firm’s international communications?
30) discuss the economic reasons for government intervention in markets.
31) porter has stated that a nation’s firms gain competitive advantage if their domestic
consumers are sophisticated and demanding. explain this statement.
32) what are the three basic decisions a firm contemplating foreign expansion must
make?
33) describe the statement 52, whose requirements all u.s.-based multinational firms
must follow.