Exam 5: The Global Context of Business

In France, McDonald's restaurants sell wine. This is a classic example of adapting to customer needs. importing. foreign exchange. misreading demand for the product. balance of payments.

Can-Eng Manufacturing, Canada's largest supplier of industrial furnaces, exports its furnaces to companies in Japan, Brazil, Germany, Korea, Taiwan, and Mexico. Can-Eng has an agreement with foreign companies in these countries called a(n) international mandate. licensing arrangement. independent agency. export agreement. strategic alliance.

Canada has a(n) ________in farming due to its fertile land, while South Korea has a(n) __________ in electronics manufacturing. absolute advantage; absolute advantage absolute advantage; comparative advantage comparative advantage: absolute advantage comparative advantage; comparative advantage none of these

All of the following characteristics describe an independent agent except that it often sells the exporter's products. often makes sure that customers are happy. often represents only one firm. often collects payments. is a foreign individual or organization.

Fembooks Bookstore sells books only over the internet. It has established an excellent reputation for finding out-of-print and hard-to-find books of interest to women. The CEO of Fembooks is considering going global with the business, since it is already established on the internet. The vice president further argues that more reasons exist for not expanding Fembooks on a global basis. Which of the following statements, if true, would NOT support the vice president's argument? Bandwidth variability can cause technical problems with ordering through the internet. Some countries require internet users to pay by the minute, which further necessitates a rapid ordering and payment procedure. Web censoring, which could impact feminist books, occurs in China, Saudi Arabia, Iran, and Malaysia. The rate of access to computers is increasing on a global basis and now stands at 15 percent, with estimates increasing to 25 percent in the next two years. Local internet web page writers would need to ensure that all offensive colors, words, and images were removed to ensure cultural adaptation.

The purpose of GATT was to improve trade balances in developing countries. reduce or eliminate trade barriers such as quotas and tariffs. stop the practice of "dumping." encourage governments to increase the protection for their domestic industries. do all of these.

When Bob began exporting his famous barbecue beef he found that one country would let him bring only 1000 pounds of beef into the country each year. Bob had just discovered a(n) embargo. local content law. quota. tariff. subsidy.

What is an exporter?

Might getting involved in a strategic alliance be considered more risky, more involved, and more complex than operating under a licensing arrangement? Explain.

What is a trade surplus?

With regard to exchange rates, it is correct to say that they affect trade balances. they typically vary substantially on a daily basis. they do not vary with market conditions. changes affect only narrow product lines, not all products. as the value of a country's currency falls, foreign companies have less incentive to ship products into that country.

Why might a company decide NOT to conduct business internationally?

The absolute advantage form of competitive advantage means that a country does not belong to any free trade agreements. that a country can produce everything better or more cheaply than any other country. that a country can produce some products better or more cheaply than it can others. that a country is the sole supplier of a product or service. that a country can produce something better or more cheaply than any other country.

"All this talk about a global economy is relevant only for big firms. My company is too small for that type of thinking." Agree or disagree with this statement, and support your position.

A licensing arrangement exists where the owner of a product or process allows another business to produce, distribute, or market it for a fee or royalty.

The country that has economically dominated Western Europe is Germany. Russia. Finland. Poland. Spain.

Beta Corp. is trying to decide whether to market its products internationally. Its first decision is to determine what the costs would be. check the business climate to see if the foreign country would be positive. check the competition to see what its situation would be. determine whether there is international demand for its products. check the exchange rates to see if they are favourable.

Exporting activity is limited mostly to multinational firms.

If a Canadian architect designs a house in Brazil, this is an example of an import of a service.

Which type of firm is one in which management doesn't think of itself as having domestic and international operations but rather as a firm that designs, makes, and markets products in many nations? An exporter An importer An international firm A multinational firm Mininational