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Page 1
1. An effort to diversify into nonrelated markets is most likely to be undertaken when firms undergo:
a.
Horizontal integration
b.
Vertical integration
c.
Conglomerate integration
d.
None of the above
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The Multinational Enterprise
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/23/2016 4:08 AM
2. The source (home) location of most of the world’s leading multinational enterprises is:
a.
North America and Europe
b.
North America and Asia
c.
Europe and South America
d.
Europe and Asia
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The Multinational Enterprise
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
3. Which type of multinational diversification occurs when the parent firm establishes foreign subsidiaries to produce
intermediate goods going into the production of finished goods?
a.
b.
c.
d.
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
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Page 2
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The Multinational Enterprise
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
4. Suppose that an American automobile manufacturer establishes foreign subsidiaries to market the automobiles. This
practice is referred to as:
a.
Forward vertical integration
b.
Forward conglomerate integration
c.
Backward vertical integration
d.
Backward conglomerate integration
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The Multinational Enterprise
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
5. Suppose that a steel manufacturer headquartered in Japan sets up a subsidiary in Canada to produce steel. This practice
is referred to as:
a.
Conglomerate integration
b.
Forward vertical integration
c.
Backward vertical integration
d.
Horizontal integration
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The Multinational Enterprise
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
Copyright Cengage Learning. Powered by Cognero.
Page 3
6. During the 1970s, American oil companies acquired nonenergy companies (e.g., copper, auto components) in response
to anticipated decreases in investment opportunities in oil. This type of diversification is referred to as:
a.
Horizontal integration
b.
Conglomerate integration
c.
Forward vertical integration
d.
Backward vertical integration
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The Multinational Enterprise
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
7. Which of the following best refers to the outright construction or purchase abroad of productive facilities, such as
manufacturing plants, by domestic residents?
a.
Direct investment
b.
Portfolio investment
c.
Short-term capital investment
d.
Long-term capital investment
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The Multinational Enterprise
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
8. In recent years, most foreign direct investment in the United States has come from:
a.
Western Europe
b.
Central America
c.
South America
d.
Asia
ANSWER:
a
POINTS:
1
Copyright Cengage Learning. Powered by Cognero.
Page 4
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Motives for Foreign Direct Investment
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
9. In recent years, the largest amount of U.S. direct investment abroad has occurred in:
a.
Central America
b.
South America
c.
Europe
d.
Japan
ANSWER:
c
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Motives for Foreign Direct Investment
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
10. Most U.S. direct investment abroad occurs in:
a.
Communications
b.
Petroleum
c.
Finance and insurance
d.
Manufacturing
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Motives for Foreign Direct Investment
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
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Page 5
11. Most foreign direct investment in the United States occurs in:
a.
Public utilities
b.
Communications
c.
Manufacturing
d.
Mining and smelting
ANSWER:
c
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Motives for Foreign Direct Investment
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
12. Which of the following is not a significant motive for the formation of multinational enterprises?
a.
Avoiding tariffs by obtaining foreign manufacturing facilities
b.
Obtaining the benefits from overseas comparative advantages
c.
The acquisition of natural resource supply sources
d.
Subsidies granted by the home government to overseas corporations
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The Multinational Enterprise
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
13. Suppose General Motors charges its Mexican subsidiary $1 million for auto assembly equipment that could be
purchased on the open market for $800,000. This practice is best referred to as:
a.
International dumping
b.
Cost-plus pricing
c.
Transfer pricing
d.
Technological transfer
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
Copyright Cengage Learning. Powered by Cognero.
Page 6
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Motives for Foreign Direct Investment
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
14. Multinational enterprises may provide benefits to their source (home) countries because they may:
a.
Secure raw materials for the source country
b.
Shift source country technology overseas via licensing
c.
Export products which reflect source-country comparative disadvantage
d.
Result in lower wages for source-country workers
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Motives for Foreign Direct Investment
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
15. Trade analysis involving multinational enterprises differs from our conventional trade analysis in that multinational
enterprise analysis emphasizes:
a.
Absolute cost differentials rather than comparative cost differentials
b.
The international movement of factor inputs rather than finished goods
c.
Purely competitive markets rather than imperfectly competitive markets
d.
Portfolio investments rather than direct foreign investments
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Motives for Foreign Direct Investment
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
Copyright Cengage Learning. Powered by Cognero.
Page 7
16. Direct foreign investment has taken all of the following forms except:
a.
Investors buying bonds of an existing firm overseas
b.
The creation of a wholly owned business enterprise overseas
c.
The takeover of an existing company overseas
d.
The construction of a manufacturing plant overseas
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Motives for Foreign Direct Investment
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
17. Which of the following would best explain why foreign direct investment might be attracted to the United States?
a.
U.S. price ceilings that hold down the price of energy
b.
U.S. wage rates exceeding the productivity of U.S. labor
c.
Artificially high prices being charged for the stock of U.S. firms
d.
Anticipations of future reductions in U.S. tariff levels
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Motives for Foreign Direct Investment
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
18. Both Coca-Cola Co. and Pepsi-Cola Co. are multinational firms in that their soft drinks are bottled throughout the
world. This practice illustrates:
a.
Backward vertical integration
b.
Forward vertical integration
c.
Horizontal integration
d.
Conglomerate integration
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
Copyright Cengage Learning. Powered by Cognero.
Page 8
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The Multinational Enterprise
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
19. The market power effect of an international joint venture can lead to welfare losses for the domestic economy unless
offset by cost reductions. Which type of cost reduction would not lead to offsetting welfare gains for the overall
economy?
a.
R&D generating improved technology
b.
Development of more productive machinery
c.
New work rules promoting worker efficiency
d.
Lower wages extracted from workers
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The Multinational Enterprise
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
20. All of the following are potential advantages of an international joint venture except:
a.
Sharing research and development costs among corporations
b.
Forestalling protectionism against imports
c.
Establishing work rules promoting higher labor productivity
d.
Operating at diseconomy-of-scale output levels
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Motives for Foreign Direct Investment
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:22 PM
Copyright Cengage Learning. Powered by Cognero.
Page 9
DATE MODIFIED:
6/22/2016 3:22 PM
21. Which term best describes the Iran Oil Investment Co.?
a.
Multinational enterprise
b.
International joint venture
c.
Multilateral contract
d.
International commodity agreement
ANSWER:
b
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
International Trade Theory and Multinational Enterprise
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
22. Multinational enterprises:
a.
Increase the transfer of technology between nations
b.
Make it harder for nations to foster activities of comparative advantage
c.
Always enjoy political harmony in nations where their subsidiaries operate
d.
Require governmental subsidies in order to conduct worldwide operations
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The Multinational Enterprise
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
23. Firms undertake multinational operations in order to:
a.
Hire low-wage workers
b.
Manufacture in nations they have difficulty exporting to
c.
Obtain necessary factor inputs
d.
All of the above
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
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Page 10
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The Multinational Enterprise
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
24. Multinational enterprises face problems since they:
a.
Cannot benefit from the advantages of comparative advantage
b.
May raise political problems in countries where their subsidiaries operate
c.
Can invest only at home, but not overseas
d.
Can invest only overseas, but not at home
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The Multinational Enterprise
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
25. American labor unions have recently maintained that U.S. multinational enterprises have been:
a.
Exporting American jobs by investing overseas
b.
Exporting American jobs by keeping investment in the United States
c.
Importing cheap foreign workers by shifting U.S. investment overseas
d.
Importing cheap foreign workers by keeping U.S. investment at home
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Multinational Enterprises as a Source of Conflict
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
Copyright Cengage Learning. Powered by Cognero.
Page 11
26. American labor unions accuse U.S. multinational firms of all of the following except: that such firms
a.
Enjoy unfair advantages in taxation
b.
Export jobs by shifting technology overseas
c.
Export jobs by shifting investment overseas
d.
Operate at output levels where scale economies occur
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Multinational Enterprises as a Source of Conflict
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
27. Which of the following refers to the price charged for products sold to a subsidiary of a multinational enterprise by
another subsidiary in another nation?
a.
Transfer pricing
b.
International dumping
c.
Price discrimination
d.
Full-cost pricing
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Multinational Enterprises as a Source of Conflict
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
28. Which business device involves the creation of a new business by two or more companies, often for a limited period
of time?
a.
Multinational enterprise
b.
International joint venture
c.
Horizontal merger
d.
Vertical merger
ANSWER:
b
POINTS:
1
DIFFICULTY:
Easy
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Page 12
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The Multinational Enterprise
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
29. International joint ventures can lead to welfare losses when the newly established firm:
a.
Adds to the preexistent productive capacity
b.
Enters markets neither parent could have entered individually
c.
Yields cost reductions unavailable to parent firms
d.
Gives rise to increased amounts of market power
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
International Trade Theory and Multinational Enterprise
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
30. Multinational enterprises:
a.
Always produce primary goods
b.
Always produce manufactured goods
c.
Produce primary goods or manufactured goods
d.
None of the above
ANSWER:
c
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The Multinational Enterprise
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
Copyright Cengage Learning. Powered by Cognero.
Page 13
Figure 9.1 illustrates the market conditions facing Sony Company and American Company initially operating as
competitors in the domestic ball bearing market. Each firm realizes constant long-run costs, MC0=AC0.
Figure 9.1. International Joint Venture
31. Consider Figure 9.1. With Sony Company and American Company behaving as competitors, the equilibrium price and
output respectively equal:
a.
$4 and 2 units
b.
$4 and 4 units
c.
$6 and 2 units
d.
$6 and 4 units
ANSWER:
b
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 9.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
International Joint Ventures
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
32. Consider Figure 9.1. At the equilibrium price, domestic households attain ____ of consumer surplus:
a.
$4
b.
$8
c.
$12
d.
$16
ANSWER:
b
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Page 14
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 9.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
International Joint Ventures
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
33. Consider Figure 9.1. Suppose that Sony Company and American Company jointly form a new firm, Venture
Company, whose ball bearings replace the output sold by the parents in the domestic market. Assuming that Venture
Company operates as a monopoly and that its costs equal MC0=AC0, the firm’s price, output, and total profit would
respectively equal:
a.
$6, 2 units, $4
b.
$4, 2 units, $2
c.
$6, 4 units, $4
d.
$4, 4 units, $2
ANSWER:
a
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 9.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
International Joint Ventures
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
34. Consider Figure 9.1. Compared to the market equilibrium position achieved by Sony Company and American
Company as competitors, Venture Company as a monopoly leads to a deadweight loss of consumer surplus of:
a.
$2
b.
$4
c.
$6
d.
$8
ANSWER:
a
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
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Page 15
PREFACE NAME:
Figure 9.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
International Joint Ventures
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
35. Consider Figure 9.1. Assume Venture Company’s formation yields new cost reductions, indicated by MC1=AC1,
which result from technological advances. Realizing that Venture Company results in a deadweight loss of consumer
surplus, the net effect of Venture Company’s formation on the welfare of the domestic economy is:
a.
No change
b.
Gain of $2
c.
Gain of $4
d.
Loss of $2
ANSWER:
b
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 9.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
International Joint Ventures
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
36. Consider Figure 9.1. Assume Venture Company’s formation yields new cost reductions, indicated by MC1=AC1,
which result from wage concessions accepted by Venture Company employees. The net effect of Venture Company’s
formation on the welfare of the domestic economy is:
a.
No change
b.
Gain of $2
c.
Loss of $2
d.
Loss of $4
ANSWER:
c
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 9.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
Copyright Cengage Learning. Powered by Cognero.
Page 16
TOPICS:
International Joint Ventures
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
37. Consider Figure 9.1. Assume Venture Company’s formation yields new cost reductions, indicated by MC1=AC1,
which result from changes in work rules by Venture Company employees that led to higher worker productivity. The net
effect of Venture Company’s formation on the welfare of the domestic economy is:
a.
No change
b.
Gain of $2
c.
Gain of $4
d.
Loss of $2
ANSWER:
b
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 9.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
International Joint Ventures
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
Figure 9.2 represents the U.S. labor market. Assume that labor and capital are the only factors of production. Also
assume the initial supply schedule of labor is denoted by S0 and consists entirely of native U.S. workers. The demand
schedule of labor is denoted by D0.
Figure 9.2. U.S. Labor Market
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Page 17
38. Consider Figure 9.2, at labor market equilibrium, _____ workers are hired at a wage rate of $____ per hour, while
total wages equal ____.
a.
2, $12, $24
b.
2, $12, $36
c.
3, $9, $27
d.
3, $9, $36
ANSWER:
a
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 9.2
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
International Labor Mobility: Migration
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
39. Consider Figure 9.2. At labor market equilibrium, the payment to U.S. capital owners equals:
a.
$3
b.
$6
c.
$9
d.
$12
ANSWER:
b
POINTS:
1
DIFFICULTY:
Challenging
Copyright Cengage Learning. Powered by Cognero.
Page 18
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 9.2
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
International Labor Mobility: Migration
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
40. Consider Figure 9.2. As the result of the Mexican migration to the United States:
a.
U.S. capital owners lose
b.
Native U.S. workers lose
c.
U.S. capital owners and native U.S. workers lose
d.
U.S. capital owners and native U.S. workers gain
ANSWER:
b
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 9.2
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
International Labor Mobility: Migration
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
41. Consider Figure 9.2. Policies that permit Mexican workers to freely migrate to the United States would likely be
resisted by:
a.
U.S. capital owners
b.
Native U.S. workers
c.
U.S. capital owners and native U.S. workers
d.
Neither U.S. capital owners nor native U.S. workers
ANSWER:
b
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 9.2
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
International Labor Mobility: Migration
Copyright Cengage Learning. Powered by Cognero.
Page 19
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
42. ____ refers to highly educated and skilled people who migrate from poor developing countries to wealthy industrial
countries.
a.
Direct investment
b.
Portfolio investment
c.
Transfer pricing
d.
Brain drain
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
International Labor Mobility: Migration
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
43. “Guest worker” programs generally result in temporary migration of workers from:
a.
Wealthy nations to wealthy nations
b.
Wealthy nations to impoverished nations
c.
Impoverished nations to wealthy nations
d.
Impoverished nations to impoverished nations
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
International Labor Mobility: Migration
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
44. Canada views immigrants as:
a.
friends
b.
foes
c.
necessary to the Canadian economy
d.
both a and c
ANSWER:
d
POINTS:
1
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Page 20
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
International Labor Mobility: Migration
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
45. Critics of U.S. trade and immigration policy maintain that
a.
It has depressed wages for many Americans
b.
It has increased the supply of less educated workers in the United States
c.
It has an adverse impact on the employment opportunities of less-skilled, American workers
d.
All of the above
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Multinational Enterprises as a Source of Conflict
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM
46. American critics of U.S. multinational enterprises contend that they promote
a.
Runaway jobs
b.
Technology transfers abroad
c.
Tax evasion
d.
All of the above
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Multinational Enterprises as a Source of Conflict
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:22 PM
DATE MODIFIED:
6/22/2016 3:22 PM