23 1 point When the US imposes tariffs on on the import of shoes from China, which of the following are likely consequences? (Check all that apply) Higher retail prices for US consumers Shoe production will return to the US and provide millions of high-paying blue collar jobs Trade diversion: US importers/retailers will seek to source shoes from other foreign countries, such as Vietnam and Mexico Higher profit margins for US shoe importers/retailers 24 1 point Which of the following metrics is most appropriate for comparing standards of living across countries? GDP per capita at PPP growth rate GDP per capita GDP per capita at purchasing power parity (PPP) GDP 25 1 point Initially, most Japanese car manufacturers built cars in Japan and exported them to the US. Starting in the 1980s, they used FDI to establish production facilities in the US. Today, most "Japanese" cars sold in the US are assembled in the US. What are two advantages of this strategy change? Reduced vulnerability to trade barriers Improved protection of intellectual property Reduced vulnerability to exchange rate fluctuations Increased economies of scale 26 1 point Anti-dumping regulations mean which of the following? There is a limited number of products you can sell into a particular foreign market All waste must be properly disposed of in the country of business and can't pollute local water/air OOOO A company cannot get rid of product they don't want in a foreign market A company cannot sell a product for less in a foreign market than it does in its domestic market to the point that it injures those foreign suppliers of the same product. 27 1 point A growing number of companies produce and sell purely digital products and services, for example mobile apps, mobile games, and SaaS business solutions. Which of the following statements is FALSE? Digital products and services are subject to taxation and regulation by governments International expansion is typically not a challenge for companies selling digital products Digital products are often characterized by economies of scale because they tend to have substantial fixed costs and very low variable costs Companies selling such digital products may still need physical offices in foreign markets 28 1 point Airbus (the European aerospace company) expects that the Euro will appreciate substantially against the US dollar, and stay at a stronger level indefinitely. Airbus exports many of its planes from Europe to the US, where it competes against Boeing, which produces planes in the US. What are two implications for Airbus? It will become more difficult for Airbus to compete with Boeing in the US market OOOO Airbus should buy more of its components in Europe to take advantage of the stronger Euro Airbus could mitigate exchange rate risks by shifting some production to the US It will become easier for Airbus to compete with Boeing in the US market 29 1 point In the past, most companies first focused on building their business domestically in their home country), before gradually expanding into international markets. Today, some companies target international markets from the start. Which term did we use in class to describe this type of company? born global transnational enterprise OOOO worldwide startup international venture 30 1 point Some types of digital products/services become more useful and valuable to customers the more people are using them. Examples are social media platforms (Facebook, LinkedIn), messaging services (Snap, Line, Whatsapp). and marketplace-type platforms (Alibaba, Doordash, Etsy) - each of these services becomes more valuable to each individual users as the total number of users increases. This phenomenon is known as... Crowdfunding Natural monopoly Network effect Economies of scale 31 1 point According to the "environmental Kuznets curve", what is the relationship between a country's per-capita income and its environmental quality? As a country gets richer, the quality of the environment deteriorates OOOO As a country gets richer, the quality of the environment first deteriorates and then improves As a country gets richer, the quality of the environment improves As a country gets richer, the quality of the environment first improves and then deteriorates 32 1 point Foreign acquisitions (such as Uber acquiring Careem) provide a potentially quick entry into foreign markets. What are disadvantages/limitations of foreign acquisitions, compared to greenfield FDI? Foreign acquisitions are only possible if there is a suitable acquisition target (i.e. a foreign company that can be acquired) Foreign acquisitions are only possible when a BIT is in place with the other country Acquirers often overpay for acquisition targets Unlike acquisitions, greenfield FDI is not affected by trade barriers