52) Demographers project that the share (percentage of population) of what we now consider the
working-age population in developed countries will decrease up to the year 2050. Which of the
following is the most likely result of this trend?
A) an increase in foreign exchange among trading blocs
B) an increase in FDI provided by developed economies
C) a higher percentage in per capita GDP in today’s developing economies than in today’s developed
economies
D) a higher percentage in per capita GDP in today’s developed economies than in today’s developing
economies
53) Which of the following is true about projected demographic changes up to the year 2050 that could
affect future production and sales locations?
A) The share of the working population should rise in developed countries and fall in developing
countries.
B) The growth in per capita GDP should be higher in today’s developing economies than in today’s
developed economies.
C) The percentage of the world population living in today’s developed countries is expected to increase.
D) The population should fall in sub-Saharan Africa.
54) We now have technology to allow people to communicate globally without traveling as much.
Leading researchers on urbanization and planning suggest that the most likely consequence of this is
________.
A) a decrease in international airline travel
B) a decreased need for immigration restrictions
C) a smaller number of retirees living in urban areas
D) a greater number of self-motivated workers e-mailing and teleconferencing with colleagues
55) All of the following have been predicted to occur in the future as the result of advances in global
communications EXCEPT which one?
A) In spite of being able to work anywhere, people will choose to live primarily where their employers
are headquartered.
B) The brightest minds will work more at home but will still need face-to-face interaction with their
colleagues.
C) People will be drawn to live in the same places that attract people as tourists.
D) People who are both highly motivated and highly creative will continue to be attracted to interact
with people like themselves.
56) Carrefour has been more successful in Europe than Walmart, whereas Walmart has been more
successful in the United States than Carrefour. What is the most likely reason for these results?
A) first-mover advantages
B) nationalistic preferences of consumers
C) lack of knowing how to adapt products
D) increased exporting fees and transportation costs
57) Carrefour expanded internationally by first ________.
A) entering adjacent countries
B) licensing its name to other companies
C) buying companies in foreign countries
D) entering many countries simultaneously with small commitments in each
58) Which of the following best explains why Burger King has developed such a strong presence in
many of the small countries of Latin America and the Caribbean?
A) These business environments allowed Burger King to take advantage of economies of scale.
B) These countries are close to a Burger King’s headquarters.
C) These countries offered greater mobility of funds than countries in the European Union.
D) Unlike the BRIC countries, these business environments did not require escalation of commitment.
59) Because many regional trading groups prohibit companies from producing in more than one member
country, companies need to understand how to evaluate international geographic alternatives.
60) Committing resources to one country usually means forgoing or delaying projects in others.
61) When planning international geographic expansion, decision makers use scanning to reduce the
number of options available to a manageable number for further detailed analysis.
62) Good scanning helps managers avoid the need to make a detailed analysis of countries when
deciding where to operate.
63) Sales potential is probably the most important variable in determining international location
decisions because consumer demand exceeds supply.
64) When comparing economic and demographic variables among countries, one should consider that
consumers in developing countries do not necessarily follow the same historical patterns as those in
more developed countries.
65) Although capital intensity is growing in most industries, labor compensation remains a significant
cost for most companies.
66) Labor cost advantages gained by moving into a country with low wages may be short-lived because
tax increases cancel out the low-wage advantages.
67) Governments that conduct takeovers of foreign companies rarely make formal declarations of their
intent to take over in advance of the action.
68) In assessing political risk, the observation of past patterns is problematic because situations may
change for better or worse.
69) Companies are usually willing to accept a lower rate of return on their investments in countries
where they can more easily sell those investments and convert the proceeds at a favorable rate.
70) Losses to companies from natural disasters are much less risky than losses from operating in violent
areas.
71) U.S. companies generally put earlier and more emphasis on countries where they perceive it’s easier
to operate.
72) Liability of foreignness refers to the situation in which a government has more stringent legal
operating regulations on foreigners and foreign companies than on its own citizens and companies.
73) An advantage of locating operations where there are many competitors is that the cluster of
competing firms attracts multiple suppliers and specialized personnel.
74) A company can best benefit from a first-mover advantage by moving into a small country, before
entering a much larger country.
75) Published government data is most often inaccurate because of translation errors from other
countries’ languages.
76) Comparability of economic information among countries is hampered by countries’ use of different
definitions for similar terms.
77) When choosing international operating locations, companies should outsource the preparation of
grids or matrices to experts rather than preparing them with their own personnel.
78) Unlike grids, matrices do not require managers to determine weights for factors that indicate risk.
79) In a concentration strategy for international expansion, a company goes first to one or a few
countries and builds up fast there before going to other countries.
80) The more a company needs to alter its products and ways of doing business to be successful abroad,
the more it should rely on a diversification strategy for entering foreign markets.
81) Headquarters management often feels that people within an established operation are the best judge
of the operation’s investment needs.
82) Companies have tended to wait too long to divest poorly performing foreign facilities, trying instead
to improve performance through expensive means.
83) A go-no-go decision for foreign expansion means that management reviews existing information
and decides whether more information is needed.
84) Profit figures for individual country operations may obscure the real impact those operations have
on total global performance.
85) In developed countries, the percentage of the working-age population (using today’s standards) is
expected to rise by 2050.
86) It is generally agreed that because of technical advancements, managers will not need face-to-face
communication in the future.
87) When income inequality is high in a specific country, the per capita GDP figures are more
meaningful.
88) The number of computer industry firms located in California’s Silicon Valley exemplifies the
concept of agglomeration.
89) What is the relationship between a company’s international market and its production location
decisions? How do firms benefit from the use of scanning techniques when making location decisions?
90) What is scanning? What opportunities and risks are most relevant to scanning?
91) In a short essay, discuss why simply examining a country’s per capita GDP and its population
doesn’t necessarily lead to a good estimate for potential demand.
92) In a short essay, discuss liquidity preference as it relates to monetary risk.
93) What is meant by liability of foreignness? How might this influence location and allocation
decisions?
94) Compare the advantages of locating foreign operations to avoid where competitors have gone versus
locating where competitors are.
95) What problems are common with the published data available about different countries?
96) What are the major types of published data that managers can use to compare countries? Describe
the tools available to managers for making country comparisons.
97) In a short essay, compare the strategies of diversification versus concentration and provide examples
of situations in which each would be used.
98) Why do companies often treat foreign reinvestment decisions differently than new foreign
investment decisions?
99) Why do companies engage in international harvesting or divestment?
100) Why do most companies examine expansion proposals one at a time rather than comparing various
expansion proposals? Do you think this is effective? Why or why not?