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Exam 3: The World Marketplace: Business Without Borders

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Question 41

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Which of the following countries most likely has a comparative advantage?

A) A South American country that produces more coffee compared to an Asian country despite having equal resources
B) An Asian country that manufactures more textile products than most countries by decreasing its production of tea
C) An Asian country that produces quality automobiles with little opportunity cost compared to other countries
D) A North American country that expands its trade relations to a neighboring country to share resources

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Question 42

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A firm that contracts with foreign producers has an obligation to ensure that those factories adhere to ethical standards.

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Question 43

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Vertiaplume, a drug manufacturing company, exports its products to more than 15 countries around the world. Regardless of reduced sales in one of these countries, Vertiaplume is able to maintain its overall profits. In the given scenario, which of the following is a reason behind Vertiaplume's ability to maintain its overall profits?

Elision Inc., an American software development company, outsourced its support operations to Luzenza, an Asian nation, because it found that Luzenza has a large cohort of English-speaking college graduates who are ready to work for one-fourth the pay of comparable American workers. Which of the following is most likely to have influenced Elision Inc.'s decision to outsource its support operations to Luzenza?

Compared to the United States, China and India have:

Which of the following statements is true of international trade?

Nescat Autos, an automobile manufacturing company, developed a secondary market for its products in a foreign country. This allowed the company to minimize its losses when its primary market failed to generate enough revenue to benefit the company. In this scenario, which of the following is most likely to have influenced Nescat Autos's decision to set up a market in another country?

Which of the following countries is involved in countertrade?

Despite their huge populations, China and India represent a much smaller opportunity in terms of size and economic growth.

The basic mission of the _____ is to promote global economic cooperation and stable growth.

In the context of international trade, often countries with the highest trade barriers have the least competition.

In the context of international trade, India, China, and the Philippines attract multibillion-dollar investments because:

In the context of international trade, which of the following statements is true of comparative advantage?

Brestine Inc., a European multinational corporation, wants to expand its customer base and decides to target the Asian market. As most Asian countries have comparatively low per capita income, the company introduces cheaper versions of its products that would appeal to the target market. In this scenario, Brestine Inc. is most likely facing the barrier of _____.

Luchen Modo, a software development firm in Asia, launched a new software for smartphones that allowed users to remotely control certain functions and features of their vehicles, such as ignition, windshields, and headlights. The success of this technology prompted other companies across the world to produce similar software. In this scenario, which of the following is most likely to have influenced other companies to produce similar software?

Nersina, a European country, exports petroleum and imports cotton and jute. In the current fiscal year, the total value of Nersina's exports is higher than the total value of its imports. In this scenario, Nersina most likely has a _____.

Resorto, a European country, exported sugar worth $600 million between 2015 and 2016 and imported tea worth $750 million during the same period. In this scenario, Resorto most likely had a _____ between 2015 and 2016.

In foreign licensing, licensors run the risk that unethical licensees may become their competitors, using information that they gained from the licensing agreement.

Tanya Williams, the chief executive officer of Willister Computers, believes that the firm is currently best equipped to enter the market of Troyesna, a fast-developing country. The firm offers a small-scale producer in Tryoesna the right to produce and market its goods based on a set of specific operating functions and requirements. This scenario of Willister Computers illustrates _____.

In the context of competitive advantage, the value of the first-best choice represents the opportunity cost of producing a second product.