Quizes Flashcards
(Tutorial 3)
Intra-industry trade will tend to dominate trade flows when which of the following exists?
A. Small differences between relative factor availability in each country.
B. Homogeneous products that cannot be differentiated.
C. Large differences between the relative factor availability in each country.
D. Constant cost industries.
A. Small differences between relative factor availability in each country.
(Tutorial 3)
A product is produced in a monopolistically competitive industry with economies of scale. If this industry exists in two countries, and these two countries engage in trade one with the other, then we would expect:
A. that this trade will lead to greater product differentiation.
B. the country with a relative abundance of factor inputs consistent with the factor intensity of the product will export this product.
C. neither country will export this product since there is no comparative advantage.
D. the country with lower production costs will export the product.
A. that this trade will lead to greater product differentiation.
(Tutorial 3) The figure below shows Home's monopolistically competitive software market. Suppose that initially the market contains 9 firms. In this case the software market can be expected to experience; A. an increase in average cost. B. a decrease in price. C. an increase in the number of firms. D. a decrease in the number of firms.
D. a decrease in the number of firms.
(Tutorial 3)
Trade without serious income distribution effects is most likely to happen
A) in simple manufactures trade between developing countries.
B) in sophisticated manufactures trade between rich countries.
C) in sophisticated manufactures trade between rich and poor countries.
D) in agricultural trade between rich countries.
E) in labor-intensive industries like clothing.
B) in sophisticated manufactures trade between rich countries.
(Heckscher-Ohlin model, similar country = income distribution, economies of scale: developing economies)
(Tutorial 3)
The figures below depict pre-trade equilibria in the Home and Foreign computer markets. Assume that Home and Foreign firms have identical costs and technology.
Based on the outcomes revealed by these graphs, it can be concluded that;
A. Foreign has the larger market. (number of firms)
B. the Home and Foreign markets cannot be integrated. (cannot when not in same industry)
C. Inferences about relative market size are not possible.
D. Home has the larger market. (number of firms)
A. Foreign has the larger market. (number of firms)
Week 44 (True, False?) “Born global” are firms that sell in every country of the world.
False
Week 44 (True, False?) A ‘letter of credit’ is a form of export credit risk insurance policy
false
Not an insurance policy as such.
Week 44 (True, False?) Uppsala” was a famous Swedish company that became the role model for many successful Swedish firms engaging in international business.
- False
University town.
Week 44 (True, False?) A distributor is a trade intermediary trading on its own account.
True
Week 44 (True, False?) Institutional distance is the extent of similarity or dissimilarity between the regulatory, normative, and cognitive institutions of two countries
True
Week 44
Licensing is a form of contract that
a. transfers a technology and the rights to use it.
b. combines all of the above transactions
c. transfers the rights to a brand name.
d. establishes a long-term supplier relationship.
a. transfers a technology and the rights to use it.
Week 44
Which statement about the Internationalization process model is correct?
a. The model mainly applies to mature multinational enterprises.
b. The model was inspired by a study of USA companies expanding first to Canada, and then to countries further afield.
c. Commitments to higher degrees of involvement in a foreign market depend on the knowledge acquired by the firm up to that time
d. The model suggests that companies have to go through certain specified stages when developing their international business operations.
c. Commitments to higher degrees of involvement in a foreign market depend on the knowledge acquired by the firm up to that time
They don’t have to (the 4th suggestion is wrong)
Week 44
An exporting firm is:
a. An intermediary receiving commission for sales
b. A firm that performs an important “middleman” function by linking sellers and buyers overseas
c. A firm buying goods or services from another country
d. A firm selling products or services to another country
d. A firm selling products or services to another country
Middleman: distributor
Week 44 A document issued by a carrier or shipping company certifying that the merchandise has been delivered, and paid for is called? a. Bill of Lading b. Letter of Credit c. Airway Bill d. Free on Board
a. Bill of Lading
Week 45 (false, correct) Indian Tata and Chinese Geely acquiring European brands and technology with the aim to enhance their operations in their home country are examples of ‘capability enhancing FDI’.
Correct
Week 45 High investment risk due to large capital commitment and long pay-back periods, yet no co-owner and integration risks, is associated with which entry mode? a. Joint venture b. Full acquisition c. Partial acquisition d. Greenfield
d. Greenfield
week 45
Which entry mode enables foreign investor to create a local operation in its own image without the need to incorporate existing structures or demands by local partners?
- Greenfield
Not full acusition: because it is not a ‘clone’ of the business
week 45
Which statement about joint-ventures (JVs) is not correct?
a. A 50-50 ownership arrangements are strongly discouraged because it creates ambiguities in decision making processes.
b. A JV does not normally involve integrating and restructuring of an existing operation.
c. A foreign investor could establish a JVs in form of a minority, majority or equal equity JV.
d. A joint ventures allows foreign investors to share costs and risks of an investment with a local partner
a. A 50-50 ownership arrangements are strongly discouraged because it creates ambiguities in decision making processes.
Week 39. Instruments of trade:
Specific tariffs are:
a. import taxes calculated based solely on the origin country.
b.import taxes calculated as a fraction of the value of the imported goods.
the same as import quotas.
c. import taxes calculated as a fixed charge for each unit of imported goods.
d. import taxes stated in specific legal statutes.
c. import taxes calculated as a fixed charge for each unit of imported goods.
Week 39. Instruments of trade:
Ad valorem tariffs are:
a. import taxes calculated solely on the origin country.
b. import taxes calculated as a fraction of the value of the imported goods.
c. import taxes stated in ads in industry publications.
d. import taxes calculated as a fixed charge for each unit of imported goods.
e. the same as import quotas.
b. import taxes calculated as a fraction of the value of the imported goods.
Week 39. Instruments of trade:
A lower tariff on imported steel would most likely benefit:
a. foreign producers at the expense of domestic consumers.
b. domestic manufacturers of steel.
c. foreign consumers of steel.
d. domestic consumers of steel.
e. workers in the steel industry.
d. domestic consumers of steel.
Week 39. Instruments of trade:
The most vocal political pressure for more tariffs is generally made by:
a. producers lobbying for import tariffs
b. consumers lobbying for export tariffs.
c. consumers lobbying for import tariffs.
d. consumers lobbying for lower import tariffs.
e. producers lobbying for export tariffs
a. producers lobbying for import tariffs
Week 39. Instruments of trade:
The tariff levied in a “large country” (Home), lowers the world price of the imported good. This causes :
a. no change in the foreign price of the good it imports.
b. foreign consumers to demand less of the good on which was levied a tariff.
c. domestic demand for imports to decrease.
d domestic demand for imports to increase.
e. foreign suppliers to produce less of the good on which was levied a tariff
e. foreign suppliers to produce less of the good on which was levied a tariff
Week 39. Instruments of trade:
an important difference between tariffs and quotas is that tariffs :
a. stimulate international trade.
b. help domestic producers.
c. are paid by foreign producers.
d. generate tax revenue for the government.
e. raise the price of the good.
d. generate tax revenue for the government.
