Question 1

When deciding where to produce,a key decision criterion for a multinational enterprise

Accepted Answer

A)  is the nationality of its founders. 
B)  hinges on the ownership of its various subsidiaries. 
C)  is the tax laws of the various countries is it considering. 
D)  is the location of its headquarters. 
A)  is the nationality of its founders. 
B)  hinges on the ownership of its various subsidiaries. 
C)  is the tax laws of the various countries is it considering. 
D)  is the location of its headquarters.

Question 2

Small countries might produce more of a particular good than their domestic citizens can consume

Accepted Answer

A)  if they are willing to take a loss on the goods produced. 
B)  if there are increasing returns to scale and export of the surplus is possible. 
C)  when arbitrage is possible. 
D)  if they are producing seasonal products. 
A)  if they are willing to take a loss on the goods produced. 
B)  if there are increasing returns to scale and export of the surplus is possible. 
C)  when arbitrage is possible. 
D)  if they are producing seasonal products.

Question 3

The transfer price between subsidiaries that maximizes profit for the parent company

Accepted Answer

A)  is the marginal cost of the producing subsidiary. 
B)  is the monopoly price of the producing subsidiary. 
C)  cannot be determined in the absence of non-production cost considerations such as taxes. 
D)  is the price that minimizes the purchasing subsidiary's marginal cost. 
A)  is the marginal cost of the producing subsidiary. 
B)  is the monopoly price of the producing subsidiary. 
C)  cannot be determined in the absence of non-production cost considerations such as taxes. 
D)  is the price that minimizes the purchasing subsidiary's marginal cost.

Question 4

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

Accepted Answer

A)  a decrease in investment opportunities in the U.S. 
B)  a decrease in investment opportunities in the Japan 
C)  a decrease in demand for European goods in Japan 
D)  an increase in investment opportunities in the eurozone 
A)  a decrease in investment opportunities in the U.S. 
B)  a decrease in investment opportunities in the Japan 
C)  a decrease in demand for European goods in Japan 
D)  an increase in investment opportunities in the eurozone

Question 5

-The above figure shows the market for rice in Japan.S₂ represents the domestic supply curve,and S₁ represents the world supply curve.If imported rice is banned,the loss in social welfare is

Accepted Answer

A)  a + b + c + d + e. 
B)  a. 
C)  c + e. 
D)  i. 
A)  a + b + c + d + e. 
B)  a. 
C)  c + e. 
D)  i.

Question 6

Rent seeking in the form of lobbying for an increase in import tariffs by domestic producers

Accepted Answer

A)  increases consumer surplus. 
B)  increases total welfare. 
C)  increases the deadweight loss. 
D)  None of the above. 
A)  increases consumer surplus. 
B)  increases total welfare. 
C)  increases the deadweight loss. 
D)  None of the above.

Question 7

International price discrimination for a good is possible if

Accepted Answer

A)  goods are sold through the gray market. 
B)  the price difference between two countries is greater than the transaction costs in arbitrage. 
C)  the price difference between two countries is less than the transaction costs in arbitrage. 
D)  None of the above. 
A)  goods are sold through the gray market. 
B)  the price difference between two countries is greater than the transaction costs in arbitrage. 
C)  the price difference between two countries is less than the transaction costs in arbitrage. 
D)  None of the above.

Question 8

Compared to free trade,a ban on imports of a good

Accepted Answer

A)  increases the domestic price of the good. 
B)  decreases consumer surplus. 
C)  results in a deadweight loss. 
D)  All of the above. 
A)  increases the domestic price of the good. 
B)  decreases consumer surplus. 
C)  results in a deadweight loss. 
D)  All of the above.

Question 9

An automobile company has two factories,one in Vietnam and one in Australia each with the same number of workers.The Vietnamese factory can produce either 150 engines or 100 transmissions per day.The Australian factory can produce either 100 engines or 75 transmission per day.

Accepted Answer

A)  The Vietnamese factory has an absolute advantage producing both engines and transmissions. 
B)  The Australian factory has an absolute advantage in the production of transmissions. 
C)  The Vietnamese factory has a comparative advantage in the production of transmissions. 
D)  Which factory has an advantage is irrelevant since the theory of comparative advantage only applies to countries, not companies. 
A)  The Vietnamese factory has an absolute advantage producing both engines and transmissions. 
B)  The Australian factory has an absolute advantage in the production of transmissions. 
C)  The Vietnamese factory has a comparative advantage in the production of transmissions. 
D)  Which factory has an advantage is irrelevant since the theory of comparative advantage only applies to countries, not companies.

Question 10

The imposition of a quota on an imported good

Accepted Answer

A)  shifts the demand curve down for the good. 
B)  shifts the supply curve up for the good. 
C)  Both A and B. 
D)  Not enough information to determine. 
A)  shifts the demand curve down for the good. 
B)  shifts the supply curve up for the good. 
C)  Both A and B. 
D)  Not enough information to determine.

Question 11

A country that is a member of the World Trade Organization

Accepted Answer

A)  can use tariffs and quotas to limit trade. 
B)  can establish preferential trading arrangements with other countries. 
C)  is allowed to eliminate all of its tariffs and quotas. 
D)  All of the above. 
A)  can use tariffs and quotas to limit trade. 
B)  can establish preferential trading arrangements with other countries. 
C)  is allowed to eliminate all of its tariffs and quotas. 
D)  All of the above.

Question 12

The share of world trade that results from multinational enterprises

Accepted Answer

A)  is less than 10%. 
B)  is between 40% and 50%. 
C)  is approximately 70%. 
D)  is unknown. 
A)  is less than 10%. 
B)  is between 40% and 50%. 
C)  is approximately 70%. 
D)  is unknown.

Question 13

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

Accepted Answer

A)  an increase in investment opportunities in the U.S. 
B)  a decrease in investment opportunities in the eurozone 
C)  an increase in demand for European goods in Japan 
D)  a decrease in demand for European goods in Japan 
A)  an increase in investment opportunities in the U.S. 
B)  a decrease in investment opportunities in the eurozone 
C)  an increase in demand for European goods in Japan 
D)  a decrease in demand for European goods in Japan

Question 14

Tariffs and quotas create a loss in social welfare because

Accepted Answer

A)  producer surplus declines. 
B)  revenues from tariffs are misspent. 
C)  consumer surplus declines. 
D)  All of the above. 
A)  producer surplus declines. 
B)  revenues from tariffs are misspent. 
C)  consumer surplus declines. 
D)  All of the above.

Question 15

An automobile company has two factories,one in Vietnam and one in Australia each with the same number of workers.The Vietnamese factory can produce either 150 engines or 100 transmissions per day.The Australian factory can produce either 100 engines or 75 transmissions per day.

Accepted Answer

A)  The Australian factory has an comparative advantage producing both engines and transmissions. 
B)  The Australian factory has an absolute advantage in the production of transmissions. 
C)  The Vietnamese factory has a comparative advantage in the production of engines. 
D)  The Australian factory has a comparative advantage in the production of engines. 
A)  The Australian factory has an comparative advantage producing both engines and transmissions. 
B)  The Australian factory has an absolute advantage in the production of transmissions. 
C)  The Vietnamese factory has a comparative advantage in the production of engines. 
D)  The Australian factory has a comparative advantage in the production of engines.

Question 16

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

Accepted Answer

A)  if production above domestic demand can be exported. 
B)  only if the consolidation creates an absolute advantage versus other trading partners. 
C)  if the government subsidizes production. 
D)  Never, because then you lose the possibility of comparative advantage gains between the production facilities. 
A)  if production above domestic demand can be exported. 
B)  only if the consolidation creates an absolute advantage versus other trading partners. 
C)  if the government subsidizes production. 
D)  Never, because then you lose the possibility of comparative advantage gains between the production facilities.

Question 17

The cost of lobbying for an import quota in a perfectly competitive market

Accepted Answer

A)  increases the welfare loss of the quota. 
B)  decreases the deadweight loss of the quota. 
C)  shifts the supply curve of the good to the left. 
D)  increases the consumer surplus. 
A)  increases the welfare loss of the quota. 
B)  decreases the deadweight loss of the quota. 
C)  shifts the supply curve of the good to the left. 
D)  increases the consumer surplus.

Question 18

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

Accepted Answer

A)  each country will produce both pizza and beer. 
B)  the U.S. will produce beer and trade with Germany for pizza. 
C)  the U.S. will produce pizza and trade with Germany for beer. 
D)  All of the above. 
A)  each country will produce both pizza and beer. 
B)  the U.S. will produce beer and trade with Germany for pizza. 
C)  the U.S. will produce pizza and trade with Germany for beer. 
D)  All of the above.

Question 19

A pollution haven is

Accepted Answer

A)  a place where people actually like pollution and view it as a positive externality. 
B)  a location with weak environmental rules that attracts manufacturing companies due to decreased costs. 
C)  a place that has very low worker wages. 
D)  unattractive for multinational investment because of the ambient pollution. 
A)  a place where people actually like pollution and view it as a positive externality. 
B)  a location with weak environmental rules that attracts manufacturing companies due to decreased costs. 
C)  a place that has very low worker wages. 
D)  unattractive for multinational investment because of the ambient pollution.

Question 20

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

Accepted Answer

A)  decrease producer and consumer surplus in both the sanctioned and sanctioning countries. 
B)  tend to increase total welfare. 
C)  tend to decrease the deadweight loss. 
D)  tend to decrease consumer and producer surplus only in the sanctioned country. 
A)  decrease producer and consumer surplus in both the sanctioned and sanctioning countries. 
B)  tend to increase total welfare. 
C)  tend to decrease the deadweight loss. 
D)  tend to decrease consumer and producer surplus only in the sanctioned country.

When deciding where to produce,a key decision criterion for a multinational enterprise

Small countries might produce more of a particular good than their domestic citizens can consume

The transfer price between subsidiaries that maximizes profit for the parent company

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

-The above figure shows the market for rice in Japan.S₂ represents the domestic supply curve,and S₁ represents the world supply curve.If imported rice is banned,the loss in social welfare is

Rent seeking in the form of lobbying for an increase in import tariffs by domestic producers

International price discrimination for a good is possible if

Compared to free trade,a ban on imports of a good

An automobile company has two factories,one in Vietnam and one in Australia each with the same number of workers.The Vietnamese factory can produce either 150 engines or 100 transmissions per day.The Australian factory can produce either 100 engines or 75 transmission per day.

The imposition of a quota on an imported good

A country that is a member of the World Trade Organization

The share of world trade that results from multinational enterprises

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

Tariffs and quotas create a loss in social welfare because

An automobile company has two factories,one in Vietnam and one in Australia each with the same number of workers.The Vietnamese factory can produce either 150 engines or 100 transmissions per day.The Australian factory can produce either 100 engines or 75 transmissions per day.

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

The cost of lobbying for an import quota in a perfectly competitive market

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

A pollution haven is

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

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Filters

Exam 17: Global Business

When deciding where to produce,a key decision criterion for a multinational enterprise

Small countries might produce more of a particular good than their domestic citizens can consume

The transfer price between subsidiaries that maximizes profit for the parent company

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

-The above figure shows the market for rice in Japan.S₂ represents the domestic supply curve,and S₁ represents the world supply curve.If imported rice is banned,the loss in social welfare is

Rent seeking in the form of lobbying for an increase in import tariffs by domestic producers

International price discrimination for a good is possible if

Compared to free trade,a ban on imports of a good

An automobile company has two factories,one in Vietnam and one in Australia each with the same number of workers.The Vietnamese factory can produce either 150 engines or 100 transmissions per day.The Australian factory can produce either 100 engines or 75 transmission per day.

The imposition of a quota on an imported good

A country that is a member of the World Trade Organization

The share of world trade that results from multinational enterprises

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

Tariffs and quotas create a loss in social welfare because

An automobile company has two factories,one in Vietnam and one in Australia each with the same number of workers.The Vietnamese factory can produce either 150 engines or 100 transmissions per day.The Australian factory can produce either 100 engines or 75 transmissions per day.

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

The cost of lobbying for an import quota in a perfectly competitive market

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

A pollution haven is

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

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Filters