Choose ONE correct answer

1- Assume an enterprise is considering establishment of a foreign production facility. Which of the following best supports this decision?

A) Its foreign competitors have higher production costs than it has.

B) Its main competitor successfully opened a foreign plant.

C) Its suppliers follow an agglomeration strategy.

D) None of its competitors have foreign production facilities.

2- Governments have signed treaties to protect foreign-owned property rights, such as investments and patents. A primary reason for doing so is to

A) gain reciprocal advantages

B) reduce the domestic effects of other countries' economic policies

C) deal with areas of concern outside the territory of any one country

D) reduce national conflicts leading to violent political demonstrations

3- Limitation of logging in the Amazon region is generally viewed as environmentally beneficial for the planet as a whole; however, unemployed Brazilian workers have felt that job creation inside Brazil is more important than climate protection outside Brazil. This example best illustrates which of the following?

A) why smaller countries are concerned that large international companies are powerful enough to dictate operating terms

B) why globalization is needed to foster uniform standards for combating environmental problems

C) how cultural homogeneity threatens the cultural foundation of smaller nations

D) how global interests can conflict with a country's local interests

4- The same automobile company produces Fiats and Ferraris. The company builds an engine plant in China with low production costs for Fiats but not Ferraris. The probable reason is that.

A) Fiat competes mainly on a focus strategy, whereas Ferrari competes mainly on a mass-market strategy

B) Fiat competes mainly on a mass-market strategy, whereas Ferrari competes mainly on a focus strategy

C) Ferrari faces global competitors in China, whereas Fiat competes in China mainly against Chinese competitors

D) although Ferrari did not build an engine plant, it will use the same Fiat engines in its models

5- ASI, a computer firm, has high foreign sales in Asia and wants to expand sales into Europe. Which of the following statements provides the most appropriate advice for ASI executives?

A) Although countries' market sizes differ, companies usually face about the same number of competitors in each national market.

B) In most industries, companies face the same competitors in each country where they operate.

C) It takes about the same amount of resources to gain national distribution in one country versus another.

D) Being a leader in one country does not guarantee market leadership in another country.

6- Which of the following is NOT true about cultural diversity?

A) Companies may gain competitive advantages by bringing together people of diverse backgrounds.

B) Cultural diversity is most successful when domestic and foreign firms establish joint ventures.

C) Cultural diversity may help a company gain deeper knowledge about products and services.

D) The process of bringing people of different national cultures together is often difficult.

7- Which of the following statements about the English language is most likely NOT true? A) The largest portion of global output is in English-speaking countries.

B) A large portion of MNEs are headquartered in English-speaking countries.

C) English is the official national language in most countries where FDI is encouraged. D) Many MNEs from non-English speaking countries use English as their operating language

8- American hamburgers, Japanese sushi, Italian pizza, Mexican tacos, and Middle Eastern pita bread are now commonly found in most countries. This best supports the argument that

A) although visible expressions of culture are becoming homogenized, basic differences in societal values remain strong

B) globalization fulfills lower order needs in Maslow's hierarchy

C) cultural imperialism is increasingly widespread

D) cultural hybridization is occurring

9- Assume a firm has operations in Tokyo, where there is a collectivist culture. Which of the following would most likely motivate the firm's Japanese employees?

A) "employee-of-the-month" programs

B) extensive vacation time

C) on-the-job challenges

D) good health benefits

10- Raj, an engineer, works long hours and takes full responsibility for both his good and bad work performance. Raj most likely believes in

A) self-determination

B) low power distance

C) collectivism

D) fatalism

11- U.S. companies monopolize much of the international entertainment media, which largely portrays U.S. products and lifestyles as glamorous and appealing. This situation would most likely be used as an example of

A) the stronger work ethic typical of developed countries

B) the spread of high-context cultures

C) cultural fragmentation

D) cultural imperialism

12- Adam, a financial manager, is preparing to transfer to Germany where he will serve as an expatriate manager of his employer's European office. Which type of legal system will he most likely have to deal with in Germany?

A) mixed

B) common

C) civil

D) theocratic

13- Skinner Electronics plans to expand into foreign markets. Top executives want the firm to focus only on locations where the rule of law prevails. Which of the following should most likely be considered by Skinner?

A) wealthier, westernized countries

B) developing, non-Western countries

C) emerging economies experiencing rapid growth

D) countries inclined toward totalitarian-style government

14- Which of the following is most typical of a command economy?

A) Consumers have choices of many substitutes for any given product.

B) Quality of products and services tends to be consistent.

C) The prices of goods and services frequently change.

D) Many products are usually in short supply.

15- A manager who refuses to bribe customs officials in a foreign country, even though it is morally acceptable in that country, is most likely to believe in which of the following perspectives on ethics?

A) relativism

B) normativism

C) humanism

D) existentialism

16- Factor mobility refers to the movement of which of the following combinations?

A) capital, technology and people

B) currency, profits and raw materials

C) labor, capital and management

D) trade, profits and materials

17- Assume the following conditions: In the United States it takes 5 units of resources to produce a ton of potatoes and 10 to produce a ton of coal. In Canada it takes 6 units of resources to produce a ton of potatoes and 9 to produce a ton of coal. According to the theory of absolute advantage,

A) the United States should export potatoes to Canada and import coal from Canada

B) the United States should export coal to Canada and import potatoes from Canada

C) the United States should import both potatoes and coal from Canada, while concentrating on production of more valuable goods

D) there would be no basis for trade

18. Costa Rica's recent economic transformation to depend more on high-tech manufacturing is largely due to its adoption of ________ trade policy.

A) an import substitution

B) a comparative advantage

C) a factor proportions

D) a strategic

19. Assume the following conditions: In the United States it takes 5 units of resources to produce a ton of potatoes and 10 to produce a ton of coal. In Canada it takes 6 units of resources to produce a ton of potatoes and 9 to produce a ton of coal. According to the theory of absolute advantage, ________.

A) the United States should export potatoes to Canada and import coal from Canada

B) the United States should export coal to Canada and import potatoes from Canada

C) the United States should import both potatoes and coal from Canada, while concentrating on production of more valuable goods

D) there would be no basis for trade

20. The diamond of national advantage would be best used to answer which of the following questions?

A) How do developed countries prevent the trade of blood diamonds?

B) How can developing countries create a significant trade surplus?

C) Why do specialized competitive advantages differ among countries?

D) Why do most innovative products originate in developed countries?