Exam 17: Global Business

-The above figure shows the market for rice in Japan. S2 represents the domestic supply curve, and S1 represents the world supply curve. If a $1 tariff is imposed on imported rice, the loss in social welfare is

Which of the following is likely to increase the exchange rate of Yen to euros (¥/€)?

If a bottle of fine French wine costs US$250 in the U.S., 2500 rand in South Africa, there are no transaction costs, and the exchange rate is 5 rand/US$, then

Which of the following is likely to decrease the exchange rate of Yen to euros (¥/€)?

According to the principal of comparative advantage a country

-The above figure shows the market for rice in Japan. S2 represents the domestic supply curve, and S1 represents the world supply curve. Suppose a free market exists. An import quota of 30 units would

Which of the following can reduce the number of cars imported?

If a foreign producer sells a good in a country at a lower price than in its home market, this is called

A firm engaging in rent seeking activity

The United States and many other countries often impose trade sanctions on other countries. These sanctions

The larger the U.S. imposed per unit import tariff on a good imported and that is also produced in the U.S.

A U.S.-based multinational has two subsidiaries, one in Lithuania where the tax rate is 15%, and one in Ireland where the tax rate is 2%. The tax rate in the U.S. is 35%. If the Lithuanian-based subsidiary is transferring a good to the Irish subsidiary and the goal is to avoid taxes, it will

A firm becomes a multinational enterprise when

A ban on imports, a tariff, or a quota raise the price to domestic consumers. This means that consumers will buy less of the product at a higher price. The loss associated with this is called

If the Mexican peso (MXN)to Brazilian real (BRL)exchange rate goes from 5.9 MXN/BRL to 5.2 MXN/BRL

If the Mexican peso (MXN)to Brazilian real (BRL)exchange rate goes from 5.9 MXN/BRL to 7.2 MXN/BRL

Your U.S.-based company is selling parts to a company in Chile and the company will pay you 9.8 million pesos in 3 months. The current exchange rate is 490 pesos/US$. If the exchange rate at the time of payment is 510 pesos/US$

If the U.S. can produce pizza for $5 each and barrels of beer for $25 each, and Germany can produce pizza for $7 each and barrels of beer for $21 each, then

If there are increasing returns to scale, then it makes sense to consolidate operations into one production facility

Acquisition of an existing solar cell production plant would be considered