162. The nation of New Maraguay has a small commercial airplane industry that is struggling
to keep up with the two large international commercial airplane manufacturers. The other nations
in its trading bloc have agreed on an import quota on commercial airplanes, which limits the
number of planes that any country in the trading bloc can buy from other airplane manufacturers.
This strategy is necessary to help the New Maraguay’s airplane manufacturer while it is in its
infancy.
163. A small Italian grocery store in a large city sells five different kinds of feta cheese:
Bulgarian, French, Danish, Greek, and a domestic cheese from Oregon. The domestic cheese
sells for less than $2.00 per pound, while all the international cheeses are priced at over $4.00
per pound. Clearly, there is an embargo on international food products.
164. The country of New Florentina requires that all imported beverages be contained in clear,
well-labeled recyclable glass bottles. Several beverage producers refuse to trade with New
Florentina because the cost of glass bottles cuts into their profits to the point where it just isn’t
worth it. New Florentina has created a nontariff barrier.
165. With all its perception of opportunity, the expansion of global trade is still plagued by
terrorism, nuclear proliferation, rogue states, and other issues.
166. China and Russia present enormous trading opportunities. However, due to political risks
in those counties, foreign direct investment is halted.
167. While Asia represents an important source of U.S. imports, few export opportunities exist
for U.S. firms to sell goods and services to Asian consumers.
168. China is currently one of the three largest exporters in the world today.
169. India and Russia are emerging markets that present enormous business opportunities.
170. Profitable opportunities in global markets are diminishing for small and medium-sized
businesses.
171. Offshore outsourcing is another term used to describe the act of U.S. firms selling their
domestically manufactured goods to foreign customers.
172. A “second wave” of offshore outsourcing involves sizable numbers of skilled, well–
educated, middle-income workers in service-sector jobs.
173. One advantage of offshore outsourcing is that consumers benefit from lower prices.
174. The second wave of offshore outsourcing is having a more negative effect on the U.S. job
market.
175. Only large firms have the resources needed to successfully compete in the global
environment.
176. As a market for U.S. exports, China represents the only major business opportunity on the
continent of Asia.
177. China’s one-party political system, its past human rights abuses, and issues related to
counterfeiting of products continue to concern some U.S. firms about doing business there.
178. In the past few decades, U.S. manufacturers shifted focus from manufacturing and
assembling products, to the design and architecture of products. Now, a new shift: the offshore
outsourcing of design and architecture is proving to be an even more serious disruption to the
U.S. economy.
179. Yesterday, Frank was trying to use his new laptop features, with only a negligible amount
of success. His warranty said that he had three months of free technical support, so he promptly
called the tech support number. After several minutes, he finally got through to someone who
spoke English (the same language he speaks), but the dialect was still difficult to understand. He
shook his head as he tried to listen carefully to every word the guy at the help desk provided, and
thought to himself, “There are some pros and cons to outsourcing. I’m not certain the service is
adding value for the customer.”
180. Telewhiz, Inc., just contracted with a firm in the Philippines to provide customer service
for its smartphone customers. Although there were cheaper labor markets that Telewhiz could
have tapped, customers have reported that they understand English-speaking Filipino people
better than English-speaking people in other countries. As an outsourcing option, it is a good
compromise.
181. As you round out your final year of college, you are trying to decide on the last two
business electives you need to take. You are leaning toward international marketing and
international financing because you recall reading that Forrester Research estimates that more
than 3 million jobs could move to global markets in the next 10 years.
182. You sell paint products and accessories for painters. Recently, you were in contact with
merchants from India who have taken an interest in your products and are willing to talk more
about entering into a contractual deal to purchase your goods. This opportunity may be just the
thing to get your business out of its slump, because you learned from your Introduction to
Business class that very few barriers exist between U.S. and Indian markets.
183. ____________ is the selling of products to another country.
184. _____________ is buying products from another country.
185. The largest importer in the global market today is:
186. In volume of exports, the two leading nations are:
187. The world market is approximately ____________.
188. Which of the following continents is home to the largest percentage of the world’s
population?
189. A nation has a ___________ in the production of a good or service if it can produce that
good or service more effectively or efficiently than it can produce other goods.
190. __________ occurs when a country has a monopoly on producing a product or is able to
produce it at a cost well below that of all other countries.
191. The theory of comparative advantage exists because:
192. One advantage of free trade is:
193. The concept of free trade means:
194. Why does it make sense to trade with other nations?
195. Which of the following statements best describes the theory of comparative advantage?
196. The tiny nation of Tinian is extremely efficient in the mining of tin. However, its climate
and terrain makes it difficult to produce corn. According to the theory of comparative advantage,
Tinian should:
197. The theory of _______________ states that a nation should produce and sell goods to
other countries that it produces most efficiently, and buy goods from other nations that they
produce more efficiently.
198. Free trade between nations generally results in:
199. A free-trade agreement is likely to result in:
200. Peru and Bolivia account for almost 97% of the production of quinoa seed, and most of it
is sold to the U.S., Japan, and other wealthy nations. According to a former Colorado State
agronomist who helped introduce the product into the U.S. several years ago, “This food is about
the most perfect you can find for human diets.” Although there are other areas where the seed
will grow (including higher elevations in Colorado), the majority of the quinoa sold in the U.S. is
imported from Peru and Bolivia. These two nations have a(n) ________________ in the production
of quinoa.
201. Carrie, a U.S. resident, says that her home computer was made in Japan. Carrie
purchased a(n):
202. Household Appliances, Inc., has a manufacturing plant near Chicago. The company
specializes in compact washers and dryers for countries where consumers have less living space.
Household Appliances participates in the global market through: