1) specific tariffs are levied as a proportion of the value of the imported good.
2) the purpose of consolidated financial statements is to provide accounting information
about a group of companies that recognize their economic interdependence.
3) the bonus a manager might receive if her subsidiary performance exceeds its
performance target is an example of an incentive.
4) by its very nature, licensing increases a firm’s ability to utilize a coordinated strategy.
5) the expansion of world trade implies that nations are becoming less dependent on
each other for important goods and services.
6) according to the internalization theory, all of the following are drawbacks of
licensing as a strategy for exploiting foreign market opportunities except:
a.licensing does not grant control over manufacturing, marketing, and strategy is
granted to a licensee in return for a royalty fee
b.licensing may result in a firm’s giving away its know-how to a potential foreign
competitor
c.licensing does not give the firm the tight control over manufacturing, marketing, and
strategy that may be required to profitably exploit its advantage
d.a firm’s capabilities such as management, marketing, and manufacturing are often not
amenable to licensing
7) the main tenet of mercantilism was that it was in a country’s best interest to maintain
a trade:
a.balance
b.embargo
c.surplus
d.deficit
8) which of the following is not likely to be a reason for investors to use the global
capital market?
a.they have a higher cost of capital as compared to purely domestic capital markets
b.they have a much wider range of investment opportunities than in a purely domestic
capital market
c.they can diversify their portfolios internationally
d.they can reduce their risk through portfolio diversification to below what could be
achieved in a purely domestic capital market
9) all of the following are gains that can be derived by manipulating transfer prices,
except:
a.a firm can reduce its tax liabilities by shifting earnings from a high-tax country to a
low-tax one.
b.a firm can move funds out of a country where a significant currency devaluation is
expected, thereby reducing its exposure to foreign exchange risk.
c.funds can be moved by a firm from a subsidiary to the parent company when financial
transfers in the form of dividends are blocked by host-country government policies.
d.if there are high transfer prices on goods or services being imported into the country, a
firm can reduce the import duties it must pay when an ad valorem tariff is in force.
10) a firm facing low pressures for cost reductions and low pressures for local
responsiveness, is most likely to follow a(n) _____ strategy.
a.global standardization
b.localization
c.international
d.transnational
11) how can firms attain tight coordination between different stages in the production
process?
a.by using information technology
b.by lowering the costs of value creation
c.by implementing iso 9000
d.by minimum efficient scale of output
12) which of the following is directly elected by the populations of the member states
and is primarily a consultative rather than legislative body?
a.the european parliament
b.the european commission
c.the council of the european union
d.the court of justice
13) a large-scale entrant is more likely than a small-scale entrant to be able to capture
first-mover advantages associated with:
a.demand preemption
b.diseconomies of scale
c.pioneering costs
d.diseconomies of scope
14) collectively, the _____ member states account for about 55 percent of the world’s
gnp and 49 percent of world trade.
a.apec
b.eu
c.nafta
d.mercosu
15) just-in-time inventory systems:
a.can help firms improve product quality
b.are fast becoming obsolete
c.require that parts be warehoused
d.give firms a buffer stock of inventory
16) any person or institution that is capable of moral action such as a government or
corporation is a(n):
a.moral agent
b.utilitarian
c.righteous moralist
d.naive immoralist
17) discuss why there is inefficiency in a monopoly situation.
18) discuss mendenhall and oddou’s assertion that an executive who performs well in a
domestic setting may not adapt to a different cultural setting.
19) when does concentration of production make sense?
20) what is the united nations convention on contracts for the international sale of
goods (cigs)?
21) how did david ricardo extend adam smith’s work? explain the theory of comparative
advantage.
22) what are the five main variables that influence the development of a country’s
accounting system?
23) what is a eurocurrency?
24) how do flexible machine cells work? what is the advantage of incorporating this
type of technology into a strategy?
25) discuss the nature of the foreign exchange market. how fast has it been growing?
where are the most important trading centers?
26) discuss the implications of international trade theory for a firm.