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Q:
When developing a market-potential indicator for an emerging market, market intensity is typically estimated from the ________.
A) per capita private consumption
B) GDP
C) total population
D) percentage of a market's population in the middle class
Q:
The theories of comparative and absolute advantage assume that specialization in the production of one particular good results in efficiency gains.
Q:
When developing a market-potential indicator for an emerging market, market growth rate is typically estimated from the ________.
A) per capita private consumption
B) GDP
C) total population
D) percentage of a market's population in the middle class
Q:
The theories of comparative advantage and absolute advantage assume that countries are driven only by the maximization of production and consumption.
Q:
When developing a market-potential indicator for an emerging market, the size of the market is typically estimated from the nation's ________.
A) income elasticity
B) GDP
C) total population
D) GDP at purchasing power parity
Q:
The ability of a nation to produce a good more efficiently than any other nation is called its comparative advantage.
Q:
Which of the following variables involved in market-potential analyses allows managers to rank countries from the largest to the smallest, regardless of a particular product?
A) market growth rate
B) market intensity
C) market size
D) market consumption capacity
Q:
Economist David Ricardo developed the theory of comparative advantage.
Q:
Developing a market-potential indicator for an emerging market is useful for a company planning on ________.
A) exporting
B) licensing
C) joint ventures
D) acquisitions
Q:
The theory of absolute advantage measures a nation's wealth by the standard of living of its people.
Q:
Which of the following is an income-elastic product?
A) food
B) utilities
C) jewelry
D) beverages
Q:
The theory of absolute advantage destroys the mercantilist idea that international trade is a zero-sum game.
Q:
If the income-elasticity coefficient for coffee is 0.5, the demand for coffee will ________.
A) decrease 0.5 percent for every 1.0 percent increase in income
B) increase 1.0 percent for every 5.0 percent increase in income
C) increase 0.5 percent for every 1.0 percent increase in income
D) decrease 0.5 percent for every 0.5 percent increase in income
Q:
A third country, Funland, also produces food and drinks. In Funland, one resource unit produces 8 tons of food and 6 tons of drinks. Which of the following is true about Funland, Foodland, and Drinkland?
A) Funland has a comparative advantage in producing drinks.
B) Funland has a comparative advantage in producing food.
C) Funland has an absolute advantage in producing food.
D) Funland has an absolute advantage in producing drinks.
Q:
In the context of the sensitivity of demand for a product relative to changes in income, a coefficient greater than 1.0 conveys a(n) ________.
A) surplus product
B) economic equilibrium
C) economic surplus
D) income-elastic product
Q:
If these two countries were to gain from trading with each other, this would support the notion that trade is a ________.
A) zero-sum game
B) negative experience
C) positive-sum game
D) form of economic nationalism
Q:
Which of the following statements is true of the above scenario?
A) Foodland has a comparative advantage in producing drinks.
B) Drinkland cannot trade with Foodland because trade is too expensive.
C) Drinkland has an absolute advantage in producing drinks.
D) Foodland should stop producing food and just produce drinks.
Q:
The sensitivity of demand for a product relative to changes in income is called ________.
A) income elasticity
B) demand shaping
C) income distribution
D) market intensity
Q:
Based on the above scenario, which of the following statements is true?
A) Foodland has an absolute advantage in producing food.
B) Foodland has an absolute advantage in producing drinks.
C) Drinkland has an absolute advantage in producing both food and drinks.
D) Drinkland has an absolute advantage in producing food.
Q:
A typical industry analysis includes the ________.
A) experience and qualifications of the researcher
B) structure of the wholesale and retail distribution networks
C) accurate forecast of unforeseen political changes in the country
D) history of currency fluctuations
Q:
Which of the following steps of the market screening process involves the determination of a product's income elasticity?
A) identification of basic appeal of a product
B) measurement of market or site potential
C) assessment of the national business environment
D) selection of the market or site
Q:
Much production in the world today closely resembles what is predicted by the ________.A) new trade theoryB) international product life cycleC) theory of comparative advantageD) theory of factor proportions
Q:
Which of the following statements is true about country image and its effects on global companies?
A) It embodies all important facets of a nation's business environment.
B) If a country's image is positive in one product class, it tends to be positive in all other product classes as well.
C) An image, once formed, seldom changes over time.
D) Products made in emerging countries are evaluated more positively than products made in developed countries.
Q:
A product's components are manufactured in a country that can produce them at a very low cost while maintaining its quality. These components are then assembled in another country where productivity in assembly is high. This process resembles the theory of ________.
A) comparative advantage
B) mercantilism
C) the international product life cycle
D) factor proportions
Q:
________ refers to management of the physical flow of products from the point of origin as raw materials to end users as finished products.
A) Operations research
B) Logistics
C) Warehousing
D) Environmental scanning
Q:
Both absolute and comparative advantage theories assume that ________ is the only resource used in the production process.
A) land
B) labor
C) capital
D) equipment
Q:
Which of the following is least likely to be caused by poor fiscal and monetary policies of a nation's central bank?
A) high rates of inflation
B) increasing budget deficits
C) depreciating currency
D) increasing levels of innovation
Q:
Which of the following is an assumption made by the comparative advantage theory?
A) maximization of production and consumption
B) government interference and control in trade activities
C) creation of trade deficits
D) creation of trade surpluses
Q:
Which of the following steps of the market screening process examines the effects of country image on market-entry decisions?
A) identification of basic appeal of a market
B) measurement of market or site potential
C) assessment of the national business environment
D) selection of the market or site
Q:
Which of the following statements is true regarding the assumptions of the absolute and comparative advantage theories?
A) The theories assume that there are many number of countries engaged in the production and consumption of just two goods.
B) The theories assume that there are additional costs for transporting traded goods from one country to another.
C) The theories assume labor to be the only resource used in the production process.
D) The theories assume that specialization in the production of one particular good results in gains in efficiency.
Q:
Which of the following steps of the screening process for potential markets involves the evaluation of fiscal and monetary policies of a nation?
A) identification of basic appeal of a market
B) measurement of market or site potential
C) assessment of the national business environment
D) selection of the market or site
Q:
According to the theory of ________, trade is beneficial even if one country is less efficient in the production of two goods, as long as it is less inefficient in the production of one of the goods.
A) absolute advantage
B) mercantilism
C) comparative advantage
D) factor proportions
Q:
Which of the following will most likely force international companies to cancel proposed investments?
A) low rates of inflation
B) increasing budget deficits
C) rising productivity levels
D) an appreciating currency
Q:
Country A produces a ton of coffee using one unit of resources. Country B produces two tons of coffee using one unit of resources. Which of the following is true regarding Country A and Country B?
A) Country A has an absolute advantage in producing coffee.
B) Country B has an absolute advantage in producing coffee.
C) Neither Country A nor Country B has an absolute advantage in producing coffee.
D) Both Country A and Country B have an absolute advantage in producing coffee.
Q:
Which of the following is an example of a legal force that is used to assess the national business environment?
A) resource quality
B) environmental regulations
C) workforce qualifications
D) liquidity issues
Q:
To complete his business bookkeeping work each month, a business owner spends about 20 hours and in the process, has to give up $900 in income. If he hired a bookkeeper to do the work, the job would be completed in 15 hours and would cost him $600. Should the owner hire the bookkeeper or continue to do the work himself?
A) He should hire the bookkeeper because the bookkeeper has an absolute advantage in completing the books.
B) He should do the bookkeeping himself because he has an absolute advantage in completing the books.
C) He should hire the bookkeeper only if the bookkeeper agrees to give him a discount on the service price.
D) He should hire the bookkeeper only if the bookkeeper is willing to complete the work in 12 hours.
Q:
The likelihood that a society will undergo governmental changes that negatively affect local business activity is known as ________.
A) volatility risk
B) systemic risk
C) political risk
D) credit risk
Q:
The theory of comparative advantage was proposed by ________.
A) David Ricardo
B) Adam Smith
C) Bertil Ohlin
D) Raymond Vernon
Q:
The key element of political risk of greatest concern for global companies is ________.
A) the cost of transporting materials and goods
B) unforeseen political change
C) currency and liquidity problems
D) letting past political events blind future opportunities
Q:
When a country is not able to produce a good more efficiently than other nations, but produces the good more efficiently than it does any other good, it is said to have a(n) ________.
A) absolute advantage
B) resource advantage
C) first-mover advantage
D) comparative advantage
Q:
Which of the following government regulations or actions would indicate that a government is quite receptive to international trade and investment?
A) creating investment barriers to ensure domestic control of an industry
B) requiring companies to divulge proprietary secrets
C) allowing companies to remove profits earned in the domestic market
D) barring companies entirely from certain sectors of the domestic economy
Q:
When there are gains to be had by both countries that are party to an exchange, international trade is considered a(n) ________.
A) positive-sum game
B) equal-sum game
C) negative-sum game
D) zero-sum game
Q:
Which of the following is true about the theory of absolute advantage?
A) The theory accepts the mercantilist idea that international trade is a zero-sum game.
B) The theory approves the objective of national governments to acquire wealth through restrictive trade policies.
C) The theory emphasizes that nations should open their doors to trade so that people can obtain more goods at cheaper rates.
D) The theory measures a nation's wealth by how much gold and silver it has on reserve.
Q:
Which of the following steps of the the market screening process involves an evaluation of the government bureaucracy?
A) identification of basic appeal of a market
B) assessment of the national business environment
C) measurement of market or site potential
D) selection of the market or site
Q:
The theory of absolute advantage destroys the mercantilist idea that international trade is a ________.
A) positive-sum game
B) zero-sum game
C) negative-sum game
D) win-win game
Q:
Which of the following steps of the market screening process involves the analysis of the quality of workforce, materials, and infrastructure?
A) identification of basic appeal of a market
B) assessment of the national business environment
C) measurement of market or site potential
D) selection of the market or site
Q:
Which of the following steps of the market screening process involves examining the cost of transporting goods?
A) identification of basic appeal of a market
B) assessment of the national business environment
C) measurement of market or site potential
D) selection of the market or site
Q:
The theory of absolute advantage measures a nation's wealth by determining the ________.
A) amount of gold it has on reserve
B) quantity of minerals it has on reserve
C) total trade volume in the country
D) living standards of its people
Q:
Adam Smith believed that ________.
A) governments should determine trade flows
B) market forces should determine trade flows
C) international trade should be restricted by tariffs and quotas
D) countries should produce most goods themselves and trade as little as possible
Q:
Which of the following is the final step in the screening process for potential markets and sites?
A) assessment of the national business environment
B) measurement of market or site potential
C) selection of the market or site
D) assessment of climate suitability
Q:
Which of the following steps should occur in the screening process for potential markets after the basic demand for a product has been identified?
A) assessment of the national business environment
B) selection of the market or site
C) measurement of the market or site potential
D) assessment of climate suitability
Q:
Who proposed the theory of absolute advantage?
A) David Ricardo
B) Adam Smith
C) Bertil Ohlin
D) Raymond Vernon
Q:
The first step in the screening process for potential markets and sites is to ________.
A) select a favorable market or site
B) measure the market or site potential
C) identify the basic appeal of a market
D) assess the national business environment
Q:
Which of the following refers to the ability of a nation to produce a good more efficiently than any other nation?
A) mercantilism
B) comparative advantage
C) absolute advantage
D) neomercantilism
Q:
Locating production facilities within regional markets is popular because ________.
A) regional markets offer greater range of resources needed for production
B) it provides duty-free access to every consumer in a trade bloc
C) the marketing strategies applied at the regional market level will also be applicable at the global level
D) it simplifies political and economic activities
Q:
Discuss the three essential pillars of the theory of mercantilism.
Q:
The single greatest disadvantage of survey research is that it provides access to only a small amount of data in a single sweep.
Q:
Explain mercantilism. What were its major flaws?
Q:
Focus group interviews tend to work best when moderators are natives of the countries where the interviews are held.
Q:
Mercantilism views competition for the world's wealth as a positive-sum game.
Q:
Trade missions are advantageous to small businesses as they are the most inexpensive method of getting introduced to important business contacts.
Q:
Mercantilist countries used to amass wealth by acquiring less-developed territories around the world.
Q:
Mercantilism states that nations should only concern themselves with accumulating financial wealth.
Q:
Interviews and focus groups are two main sources of secondary data that help managers make informed decisions.
Q:
Trade between most nations is presently characterized by a certain degree of isolationism.
Q:
Industry data cannot indicate how individuals feel about a company or its products.
Q:
Another term for neomercantilism is ________.
A) new trade
B) free trade
C) economic nationalism
D) political nationalism
Q:
The process of collecting and analyzing original data and applying the results to current research needs is called primary market research.
Q:
Secondary data tends to be very expensive because it has already been analyzed and summarized by another party.
Q:
Today, countries seen by others as trying to maintain a trade surplus and expand their national treasures at the expense of other nations are accused of practicing ________.
A) totalitarianism
B) anti-mercantilism
C) social stratification
D) economic nationalism
Q:
The process of obtaining information that already exists within the company is called secondary market research.
Q:
Nations following the theory of ________ believed that the world's wealth was limited and that a nation could increase its share of the pie only at the expense of its neighbors.
A) absolute advantage
B) comparative advantage
C) mercantilism
D) factor proportions
Q:
Which of the following statements is incorrect with regard to the importance of colonies for mercantilist nations?
A) They served as sources of inexpensive raw materials.
B) They served as markets for higher-priced finished goods.
C) They served as a source of military protection.
D) They served as a source of profits for mercantilist powers.
Q:
The potential to conduct written surveys is independent of the literacy rates among the local population.
Q:
According to mercantilism, the accumulation of national wealth depended on the ________.
A) increase in a nation's trade surplus
B) increase in a nation's trade deficit
C) expansion of a nation's total value of trade
D) expansion of a nation's total volume of trade
Q:
One of the main difficulties associated with conducting international market research is the measurability of data.
Q:
While assessing the market potential of emerging markets, market consumption capacity is generally obtained through estimates of energy consumption.
Q:
One of the major pillars upon which the practice of mercantilism rested was ________.
A) economies of scale
B) pricing mechanism
C) excessive imports
D) trade surpluses
Q:
Assessing potential in emerging markets by ranking locations using market-potential indicators is useful only for companies involved in exporting.
Q:
Which of the following was a prominent mercantilist nation?
A) U.S.
B) China
C) Britain
D) Japan