Archives: Quiz

The WTO supports trade with discrimination as a basic right of trading nations. Trade flows are good indicators of the magnitude of present sales. TRUE As stated directly in the text. The level of merchandise exports coming from Africa decreased […]

The main transportation artery of Europe is the: A. Venice canal system. B. Danube-Dresden waterway. C. Lake Constantine system. D. Rhine waterway. The Doha Development Agenda is: A. a WTO conference on trade. B. an agreement on climate control and […]

Manufacturing rationalization is: A. the allocation of scarce resources. B. the division of production among several subsidiaries so that each produces only a limited number of components for all subsidiaries. C. the concentration of production at one site to get […]

Laws governing transactions of individuals and companies that cross international borders are: A. none of B, C, D, or E. B. private international law. C. product liability law. D. public international law. E. customary law. According to the text, the […]

In the United States, punitive damage rulings have no measureable effect on medicine. Greater profits may be obtained by either increasing total revenue or decreasing the cost of goods sold. TRUE As stated directly in the text. Seeing what needs […]

The International Court of Justice (ICJ) handles all cases brought forward by any person or organization. The spot rate is the rate for exchange within two days in the currency market. TRUE The spot rate is the rate today for […]

Strategic planning processes are something that only the company’s most senior executives are involved with. The United Kingdom Bribery Act includes penalties for corporate failure to prevent bribery, but only if the act of bribery occurred in the United Kingdom. […]

Although India is a member of the WTO and has benefited greatly from increased trade as a result of WTO agreements, China is not yet a member. In the method favored by the majority of American ICs, the salary part […]

Benefits of trade fairs include sales, making contacts with prospective buyers and agents, and competitive intelligence. Swap contracts exchange foreign currency debt for another liability in the home currency. FALSE Swaps are agreements to exchange currencies at specified rates and […]

There is a trend toward treating third-country nationals the same as home-country expatriates in terms of their compensation plans. The unspoken language cannot tell the international manager something that the spoken language does not. FALSE Nonverbal communication, if understood, can […]

Although international firms maintain manufacturing facilities in countries at various levels of development, manufacturing systems should not vary significantly within the same company. There are four main types of FX risk: transaction, translation, economic, and arbitrage exposure. FALSE The first […]

Strategic business units are an organizational form in which geographic divisions have been defined as though they were distinct, independent businesses. On an open account, the buyer assumes all of the payment risk. FALSE As stated directly in the text. […]

The international Fisher effect states that the interest rate differentials for any two currencies reflect the expected change in their exchange rates. Environmentally sustainable businesses need to consider the economic and ecological systems in which they function, but not the […]

New types of dumping include concession dumping. Geographical proximity is rarely a major reason for trade. FALSE To the contrary, geographical proximity often explains trade relationships. Virtual team leadership is similar to co-located team leadership. FALSE Virtual team leadership has […]

Incoterms are established by the UN Commission on International Trade. International strategy involves decisions that deal with a single area, such as marketing or production. FALSE International strategy deals with all the various functions and activities of a company and […]

Formal institutions operate through laws and regulations. They require members to make a written commitment. Companies with a transnational strategic orientation follow a global staffing policy, selecting the best person for each job without considering national origin and generally having […]

In some cases, an international company legally can keep more profit after taxes by allocating work and prices. Corporate anthropology refers to the process of obtaining market research data through focus groups and surveys. FALSE Corporate anthropology refers to the […]

Out of all the pricing methods mentioned, the preferred one for sellers is Ex-Works/factory door. Japanese cultural values suggest that in Japan, antitrust law against cartels would be strictly enforced. FALSE The zaibatsu, Japanese conglomerate, is hampered by antitrust legislation, […]

The EU is a supranational body that has become, essentially, a regional government. There is reverse culture shock when an expatriate returns to the home country and company. TRUE As stated directly in the text. Porter’s diamond can be used […]

Advertisers have followed glocalization to reduce costs, enabling them to develop a common strategy for large regions. For the conservative international firm, there is no reason to move money other than the repatriation of profits. FALSE Firms will need to […]

The sales agreement should specify as simply as possible the duties of the representative and the firm. According to the text, Zara’s strategy of speed and flexibility has enabled the company to eliminate inventory. FALSE Zara’s strategy of speed and […]

College students may make good interviewers for firms doing market research in foreign countries. Once in export markets, new exporters tend to maintain their focus on them, despite what is happening in the home market. FALSE As stated directly in […]

Human resources are influenced by cultural values because values are the foundation of motivation and evaluation. Finance is best left decentralized in international firms so that local efficiencies and opportunities can be accessed. FALSE The trend is to centralize the […]

ASEAN, whose initial goal was political, to foster peaceful relations among members, includes China as its core member. Globally, the overall level and rate of growth of merchandise exports exceed those of commercial services. FALSE The level of merchandise exports, […]

In a 12-country study conducted by Ernst & Young, 65 percent of U.S. companies were found to be engaged in a strategic alliance. Hall’s high-and low-context framework is based upon communication styles. TRUE Context is a critical aspect of communication […]

Trompenaars’ achievement vs. ascription dimension describes social status based on what one does or who one is. The United States is a culture in which people build who they are through work, so its social status tends to be based […]

The same general criteria for selecting home-country employees apply to host-country nationals. Multiplicity and interdependence are among the four dimensions of complexity identified by scholars. TRUE The other two are ambiguity and dynamism. FASB 52 requires that companies record foreign […]

Direct investment refers to overseas purchases of stocks and bonds to gain a return on the funds invested. For controls to be effective, all operating units of an IC must provide headquarters with timely, accurate, and complete reports, including those […]

If Tiger Toys faces a demand curve of P = 85 − 0.25Q and a MC = ATC = 20, then the markup would be A. $52.50. B. $20.00. C. $32.50. D. $65.00. Bundling of complements to create value strategically […]

Refer to Table 5.2, which gives cost information for the production of widgets. Some values are missing, however. Which of the following is true? A. A = 45, E = 40 B. A = 45, E = 10 C. A […]

Firms with internal labor markets have more flexibility in deciding the level and time profile of wages because A. individuals tend to base their employment decisions on their entire career earnings. B. they have to pay the wage rate that […]

Markets are usually preferred by economists for efficient transactions. However, Ronald Coase noted that administrative solutions may be superior because market transactions are: A. never achieved at the equilibrium price. B. not costless. C. always result in a price that […]

Many firms offer substantial rebates by mail or coupons for discounts at the point of sale. The people who use the rebates or coupons have ______ than the people who don’t use them. A. greater price sensitivity B. the same […]

If a management innovation is going to be successful, it needs to address: A. the personal problems of its workers. B. incentive and reward systems. C. the concerns of its rivals. D. the problem of unemployment. A primary reason for […]

Role models, company folklore, and rituals are: A. the key components of corporate culture. B. not parts of most companies’ corporate culture. C. not considered in an economic analysis of organizational architecture. D. the key components of a barter economy. […]

A person buys a used 1998 Honda Civic and finds that there is a problem in the drive train so that the whole set of axles must be replaced. However, the state has a law that protects the buyer from […]

Fama and Jensen suggest that “the form of organization that survives in an activity is the one that delivers the product demanded by customers at the lowest price while covering costs.” This is an example of A. market and organizational […]

J.T. Smith’s company, Gamemaker, sells gambling equipment to gaming service companies. Since the quality of the equipment is difficult to monitor and gamblers are often the source of machine failure, Smith could cheat on the level of machine quality. However, […]

Which of the following is not a benefit of decentralization? A. Effective use of local knowledge B. Possibility to shirk and enjoy credits from free riding C. Conservation of management time D. Possibility to increase motivation and productivity The fast-food […]

ABC Corp. has a bonus plan in place for its CEO, linking her pay to annual earnings. ABC will pay her $180,000 if earnings are high, $90,000 if they are normal, and $0 if they are low. Each event is […]

Electric generator companies did not raise their prices when there was a huge demand for their products, due to a power shortage. The companies decided against a price rise because they were A. concerned about being sued by consumer activists. […]

George likes skiing and needs one pair of bindings for each pair of skis he owns. George’s indifference curves for skies and bindings A. are approximately L-shaped. B. are straight lines. C. slope downward. D. slope upward. The following diagram […]

Johnny consumes only bread and milk. Suppose the quantity of milk is measured along the horizontal axis. If the price of milk rises, his budget constraint will A. shift outward. B. shift inward. C. rotate inward along the horizontal axis. […]

Which of the following statements is true? A. Every game has a dominant strategy. B. Not every game has a dominant strategy. C. Every game has multiple Nash equilibria. D. People never choose the strategies that result in Nash equilibrium. […]

FancyFoods provides a monthly bonus for servers when sales volume exceeds 120 percent of the same month last year. The size of bonus is tied to the individual server’s sales of meals in comparison to an average server’s sales. This […]

Diversifying to reduce volatility is a good idea only if A. shareholders can diversify within their own investment portfolios at low cost. B. firms are willing to invest in capital formation. C. firms account for social costs of production. D. […]

Assume D1 represents the current demand curve for skis. Which of the following would most likely cause D1 to shift to D2? A. An increase in the price of snowboards B. A decrease in the price snowboards C. A decrease […]

Which of the following is an important lesson to keep in mind during benchmarking? A. Benchmarked firms should be made aware of the said firm’s motivation. B. Differences in environments of the benchmarked firms should be taken into account. C. […]

In a very basic principal-agent model, output is contractible if: A. it can be observed with some positive cost. B. the employee produces many products. C. the employee works in a team. D. the employee works independently and cannot game […]

In the Celtex case study, Leo Garcia, President of the synthetic chemical division, regularly fails to sell his products to and through the consumer products division. This is because: A. there is a market-based alternative to his products that are […]