Chapter 5- Business Markets and Globalization

Question 1

Define a market

Answer 1

a place where people go to buy and sell goods and services

Question 2

Define a free market

Answer 2

a market that has limited government involvement.

Question 3

What are the general market types?

Answer 3

1. perfectly competitive market
2. monopoly
3. monopolistic competition
4. oligopoly

Question 4

Define a perfectly competitive market.

Answer 4

one where there are a large number of small firms selling identical products. everyone has perfect information and it’s easy for businesses to enter and leave the market.

Question 5

Define a monopoly.

Answer 5

when one seller controls the quantity of the goods and service supplied. Prices for goods and services in a monopoly can be set as high as buyers are willing to pay since there’s no competition.

Question 6

Define monopolistic competition

Answer 6

the type of market you find in the United States. There are a large number of businesses selling similar products. Businesses compete on price and different characteristic of their products and services.

Question 7

Define an oligopoly.

Answer 7

when there is a small number of large businesses that produce the same or similar goods or services, such as a car.

Question 8

What is power distance?

Answer 8

how the power is distributed in a culture and the view that this distribution is unequal

Question 9

what is individualism?

Answer 9

the cultural desire to work alone.

Question 10

what is collectivism?

Answer 10

the cultural willingness to work in teams.

Question 11

What is meant by masculinity?

Answer 11

refers to a culture’s vies of material achievement.

Question 12

what is meant by femininity?

Answer 12

refers to the cooperation and quality of life.

Question 13

What is uncertainty avoidance?

Answer 13

some cultures are not good with uncertainty or ambiguity. this dimension relates to how a culture views uncertainty.

Question 14

what is Long-Term Orientation?

Answer 14

when a culture looks for long-term solutions.

Question 15

Define international business

Answer 15

conducted when either importing products and services or exporting products and services

Question 16

Define licensing

Answer 16

a company giving another company the right to make their product.

Question 17

Define Joint Venture

Answer 17

two companies come together to work as one to produce a product or service.

Question 18

Define a wholly owned subsidiary

Answer 18

when a company owns a foreign company so that they can make sure quality is present.

Question 19

What is strategic alliance?

Answer 19

A short-term venture where neither company invests any money to form a third company.

Question 20

Define globalization

Answer 20

the process of moving to a global market.

Question 21

what is the global market?

Answer 21

a market that spans the entire world where goods, services, capital and labor are freely traded.

Question 22

Define absolute advantage

Answer 22

the production of goods or services for which the country has the best resources and specialized skills

Question 23

define comparative advantage

Answer 23

the production of goods or services at a lower opportunity costs than other goods and services

Question 24

Define Emerging markets

Answer 24

markets that provide new sources of customers and cheap labor for global companies.

Question 25

define economic integration

Answer 25

the level with which markets use trade treaties all the way up to economic unions.

Question 26

What problem(s) do emerging markets present to developed markets?

Answer 26

Mature markets face a dramatic shift in labor requirements, lose of jobs and certain industries.