Business Management: Real World Applications & Connections

Chapter 7: International Business

TRUE OR FALSE
Please answer the following questions as true or false.


1.	Countries who have the absolute advantage in the production of a commodity should always invest in the production and trade of that product.

		A)	True
		B)	False

2.	The United States spends more to purchase imported goods than any other country in the world.

		A)	True
		B)	False

3.	Companies who do not want to invest a significant amount of money on foreign operations costs might consider selling products through a foreign intermediary.

		A)	True
		B)	False

FILL IN THE BLANKS
The following questions require you to find the correct answer that should appear in the blank.


4.	A tax on imports is called _____.

		A)	a tariff
		B)	an embargo
		C)	a quota
		D)	comparative advantage

5.	Restrictions on trade are reduced or eliminated in _____.

		A)	international trade
		B)	the global economy
		C)	the balance of trade
		D)	a free trade area

6.	It is appropriate to arrive to a business meeting late in _____.

		A)	China
		B)	Switzerland
		C)	Indonesia
		D)	none of the above

CONNECT THE INTERNATIONAL BUSINESS STRATEGY
Match the international business operations strategy to its corresponding benefit.


7.	Licensing agreement

		A)	Allows a company to expand both markets and operations and take advantage of cheaper foreign labor.
		B)	Allows a company to gain access to new markets by partnering with well-known firms in the home country.
		C)	Allows a company to gain share of the profits made when a foreign business sells the home company's goods.

8.	Multinational corporation

		A)	Allows a company to expand both markets and operations and take advantage of cheaper foreign labor.
		B)	Allows a company to gain access to new markets by partnering with well-known firms in the home country.
		C)	Allows a company to gain share of the profits made when a foreign business sells the home company's goods.

9.	Strategic alliance

		A)	Allows a company to expand both markets and operations and take advantage of cheaper foreign labor.
		B)	Allows a company to gain access to new markets by partnering with well-known firms in the home country.
		C)	Allows a company to gain share of the profits made when a foreign business sells the home company's goods.

MULTIPLE CHOICE QUESTION


10.	What factor(s) would you have to consider when calculating the opportunity cost of taking a luxury cruise?

		A)	To respond to advances in civil rights
		B)	To offset poor sales in a particular area with stronger sales in another.
		C)	Both
		D)	Neither