Exam 1: Globalization and the Multinational Enterprise

Comparative advantage was once the cornerstone of international trade theory, but today it is archaic, simplistic, and irrelevant for explaining investment choices made by MNEs.

Of the following, which was NOT mentioned by the authors as an increase in the demands of financial management services due to increased globalization by the firm?

Three necessary conditions for a firm to reach the top of the "firm value pyramid" are an open market place, high quality strategic management, and access to capital.

TABLE 1.1 Use the information in the table to answer following question(s). -Refer to Table 1.1. If each country specializes in their production with Austria producing only digital cameras and Russia producing only snowboards, at a trading rate of three snowboards per digital camera, how many cameras and snowboards will be available to be consumed in Austria if they trade 3,000 cameras to Russia?

Which of the following would NOT be a way to implement comparative advantage?

Which of the following is NOT considered to be a type of competitive advantage that may be enjoyed by an MNE?

TABLE 1.1 Use the information in the table to answer following question(s). -Refer to Table 1.1. Austria has a larger relative advantage over Russia in the production of ________ at a ratio of ________.

In determining why a firm becomes multinational there are many reasons. One reason is that the firm is a market seeker. Which of the following is NOT a reason why market seeking firms produce in foreign countries?

Of the following, which was NOT mentioned by the authors as an increase in the demands of financial management services due to increased globalization by the firm?

The authors describe the multinational phase of globalization for a firm as one characterized by the

TABLE 1.1 Use the information in the table to answer following question(s). -Refer to Table 1.1. Assume no trade between Russia and Austria. If each country put 50% of their production units into each product, the total number of snowboards and digital cameras produced by the two countries combined are ________ and ________.