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International Business
International Business MCQs
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Olive oil prepared in a small Italian oil press factory and sold by large supermarkets in the United States is an example of a ________.
net national product
U.S. export
U.S. import
gross domestic product
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Which of the following terms applies to the sale of a particular brand of jeans manufactured in the U.S. and sold in Canadian stores?
exporting
outsourcing
insourcing
importing
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A business that has direct investments (in the form of marketing or manufacturing subsidiaries) abroad in several countries is called a ________.
dummy corporation
shell corporation
multinational corporation
domestic corporation
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The rise of a new international entity called the ________ suggests that any company, regardless of age, experience, and resources, can engage in inte...
transnational corporation
multinational corporation
born global firm
global firm
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Small companies selling traditional products benefit from ________.
the barriers to trade that restrict their products from crossing domestic boundaries
increased investment by foreign competitors in domestic markets
government policies that seek to regulate the flow of capital across national borders
technology that lowers the costs and difficulties of global communication
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________ is the trend toward greater economic, cultural, political, and technological interdependence among national institutions and economies.
Privatization
Heterogenization
Globalization
Decentralization
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Development that meets the needs of the present without compromising the ability of future generations to meet their own needs indicates ________.
egalitarianism
denationalization
generalizability
sustainability
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An established consumer market that primarily comprises the middle class and possesses efficient infrastructure is characteristic of ________ markets....
emerging
frontier
traditional
developed
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________ markets are characterized by the rural population migrating to cities for better pay and thus, overloading cities'; infrastructures.
Traditional
Emerging
Virtual
Developed
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Kireki is a small country with a corrupt government. Its population is rural for the most part and citizens have few or no legal rights. Which of the ...
developed market
traditional market
emerging market
virtual market
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Ethnocentricity can be defined as the ________.
scientific description of individual human societies
systematic study of an ethnic group's religious core
merging of all ethnic practices into one homogeneous culture
belief that one’s own ethnic group or culture is superior to that of others
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Detailed knowledge about a culture that enables people to work happily and effectively within it is called ________.
cultural literacy
cultural imperialism
cultural diffusion
cultural divergence
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Which of the following is a cultural component that implies gauging the beauty and appeal of artwork?
customs
mores
folkways
aesthetics
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_______ is increasing the pace of both cultural diffusion and cultural change.
Collectivism
Enculturation
Fundamentalism
Globalization
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Cultural change occurs when people integrate into their culture the gestures, material objects, traditions, or concepts of another culture through ___...
ethnocentricism
cultural diffusion
social stratification
xenocentrism
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_______ facilitate(s) the process of cultural imperialism.
Strict product liability laws
Relaxed trade and investment barriers
Technological stagnation
Social media censorship
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________ is a system in which a supervisor walks an employee through every step of an assignment or task, monitoring the results at each stage.
Situational attribution
Situational management
Social mobility
Social stratification
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Folk customs that spread by cultural diffusion to other regions develop into ________.
trash culture
traditions
popular customs
superstitions
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Nepotism often prevails in ________ cultures.
extended-family
individualistic
monotheistic
nuclear family
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Which of the following political ideologies states that every aspect of people's lives must be controlled for a nation's political system to...
totalitarianism
capitalism
anarchism
pluralism
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________ is the belief that only individuals and private groups should control a nation's political activities.
Pluralism
Anarchism
Theocracy
Totalitarianism
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_______ is the belief that both private and public groups play important roles in a nation's political activities.
Totalitarianism
Capitalism
Anarchism
Pluralism
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A ________ is a political system in which a country's religious leaders serve as its political leaders.
democracy
theocracy
plutocracy
septocracy
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________ is a political system in which political leaders rely on military and bureaucratic power to support their rule.
Secular totalitarianism
Secular anarchism
Theocratic totalitarianism
Theocratic pluralism
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Which of the following terms refers to an economic system in which the government owns and controls all types of economic activity?
socialism
sovereign nationalism
political bureaucracy
pluralism
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In a ________ government, the strongest political parties share power by dividing government responsibilities among themselves.
coalition
bilateral
totalitarian
theocratic
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Democracies try to preserve peaceful coexistence among groups of people with diverse cultural, ethnic, and racial backgrounds. These rights are known ...
indirect
central
subcapital
minority
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A ________ economy is a system in which the government owns a nation's land, factories, and other economic resources, and schedules nearly all ec...
mixed
market
centrally planned
laissez-faire
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Which of the following is an important factor in forming successful business ventures in China?
following the strategies of western countries for establishing business relationships
focusing on establishing tight formal contracts
giving high importance to written contracts
establishing a trusting relationship before proceeding with business
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In which of the following systems is land, factories, and other economic resources equally split between private and government ownership?
market economy
black market economy
mixed economy
centrally planned economy
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France, Germany, and Sweden are examples of ________.
centrally planned economies
market economies
closed economies
mixed economies
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The selling of government-owned economic resources to private operators is called ________.
price mechanism
social stratification
privatization
guanxi
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In a market economy, economy-related decisions are determined by the interactions between ________.
the government and individuals
supply and demand
customers and employees
large and small businesses
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Assuming insects destroyed most of the coffee crops in key coffee-producing countries worldwide, which of the following would most likely occur within...
Coffee prices would increase.
Coffee prices would decrease.
Demand for coffee would increase.
Demand for coffee would decrease.
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Laissez-faire economics refers to ________.
less government interference in commerce and greater individual economic freedom
a government-controlled system with less economic freedom at the individual level
a centrally planned economic system
creating monopolies through government partnership
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Supply and demand are dictated by ________.
government ownership
free enterprise
the price mechanism
the management's decisions
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In a market economy, access to alternative purchase options is known as ________.
price-sensitivity
economic transition
laissez-faire
free choice
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________ says that nations should accumulate financial wealth, usually in the form of gold, by encouraging exports and discouraging imports.
Absolute advantage theory
Factor proportions theory
Mercantilism
Communism
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One of the major pillars upon which the practice of mercantilism rested was ________.
economies of scale
pricing mechanism
excessive imports
trade surpluses
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The condition that results when the value of a country's imports is greater than the value of its exports is called ________.
a trade deficit
economies of scale
a break-even point
absolute advantage
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Nations following the theory of ________ believed that the world's wealth was limited and that a nation could increase its share of the pie only ...
absolute advantage
comparative advantage
mercantilism
factor proportions
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Today, countries seen by others as trying to maintain a trade surplus and expand their national treasures at the expense of other nations are accused ...
totalitarianism
anti-mercantilism
social stratification
economic nationalism
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Which of the following refers to the ability of a nation to produce a good more efficiently than any other nation?
mercantilism
comparative advantage
absolute advantage
neomercantilism
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When a country is not able to produce a good more efficiently than other nations, but produces the good more efficiently than it does any other good, ...
absolute advantage
resource advantage
first-mover advantage
comparative advantage
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What is term used to describe a reduction in average cost of production arising from a firm operating on a larger scale?
Diseconomies of scope
Economies of scale
Economies of scop
Fixed-cost spreading
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If fixed costs are $200,000 and the variable costs associated with producing 50,000 shoes is $400,000, what is the average cost (per shoe)?
$4
$8
$12
$14
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If fixed costs are $200,000 and the variable costs associated with producing 80,000 shoes is $640,000, what is the average cost (per shoe)?
$2.50
$8.50
$10.50
$12.00
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If fixed costs are $200,000 and the average variable cost per shoe is $8, what is the total profit that would be earned if the average selling price p...
$1,280,000
$1,560,000
$1,750,000
$2,200,000
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What are internal economies of scale?
Cost savings due to factors within the firm’s control
Cost savings occurring due to improved infrastructure
Cost savings occurring due to industry growth
Cost savings occurring due to technological progress
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Which of the following is not an example of an internal economy of scale?
Managerial economies of scale
Purchasing economies of scale
Availability of specialist labour D. Marketing economies of scale
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When a firm can utilize highly efficient machinery and automation techniques to mass produce its output and reduce average cost, this is a ___________...
Financial
Technical
Purchasing
Specialisation
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When a large firm can borrow money at a lower cost compared to a small firm, this is a _____________ economy of scale.
Technical
Risk-bearing
Purchasing
Financial
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Which option is not an example of external economies of scale?
Regional specialization and expertise
Technological advancements
Improvements in infrastructure
Risk-bearing economies
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If an area possesses significant production support services and an abundance of highly skilled labour, allowing firms to reduce their average costs, ...
Regional specialization
Managerial economies
Internal economy of scale
Marketing economies
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What are internal diseconomies of scale?
Reductions in average costs that arise when the firm operates on a larger scale
Increases in average costs that arise when the firm operates on a larger scale
Reductions in average costs that arise when the industry grows as a whole
Increases in average costs that arise when the industry faces problems such as traffic congestion, higher rental expenses and labour shortages
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What is not an example of internal diseconomies of scale?
Increased bureaucracy
Communication and coordination breakdowns
Increased rental expenses
Alienation of lower level employees from management
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What is not a factor causing external diseconomies of scale?
Traffic congestion
Increased rental expenses
Shortages of labour
Economic downturns
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Which option is not a benefit of being a small firm?
Ability to provide personalised services
Flexibility
Easy access to funds
Greater freedom in decision-making
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What is not a benefit of being a large organisation?
High brand recognition and loyalty
Increased flexibility to changes in the market
Ability to provide additional value-added services
Enhanced access to finance, high-quality labour and distribution channels
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What are mergers, acquisitions and franchising examples of?
External growth
Internal growth
Diseconomies of scale
Economies of scale
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Which of the following is not a valid method of achieving internal growth?
Mergers and takeovers
Providing superior trade credit facilities
Increasing investment
Developing superior products
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What is not an advantage of organic growth?
Control and ownership of the organization is maintained
Less risky compared to inorganic growth
It is relatively cheaper
It prevents diseconomies of scale
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What is not an advantage of external growth?
It reduces or eliminates competition
It is quicker than organic growth
It can help raise market share and market power
It is cheaper and less risky compared to organic growth
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When two companies come together to form a new, combined entity, this is called a(n) ____________; when one company buys out a controlling interest in...
Merger, acquisition
Acquisition, strategic alliance
Joint venture, acquisition
Strategic alliance, joint venture
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What is not an advantage of mergers and acquisitions as a method of external growth?
They allow for quick diversification
They allow for higher market share and market power
They limit the extent of culture clashes
They allow for economies of scale to be achieved
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What is not a disadvantage of mergers and acquisitions?
They are prone to organizational culture clashes
They reduce a firm’s market power
They are expensive and highly risky
Diseconomies of scale may occur
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What is the main difference between a joint venture and a strategic alliance?
A joint venture involves forming a new legal entity whereas a strategic alliance does not
A joint venture facilitates geographic diversification whereas strategic alliances facilitate product diversification
A joint venture involves pooling resources whereas a strategic alliance involves one company renting the productive resources of another
A joint venture is done between the private and public sector, whereas a strategic alliance involves parties from only the private sector
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What is not an advantage of a joint venture?
Synergies can be created when resources are shared
Risks are spread
Economies of scale can be achieved
Culture clashes are limited
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What is not a disadvantage of joint ventures and strategic alliances?
Culture clashes are likely
There are enhanced financial risks to each party
Diseconomies of scale may set in
There may be a dilution of the individual brands
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What is the business model where a firm sells the legal rights to trade under its brand name?
Acquisition
Franchise
Joint venture
Strategic alliance
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What is not an advantage of franchising as a method of growth for the franchisee?
Regular royalty payments are received
Entrepreneurial abilities and flexibility of franchisees are encouraged
Relatively low risk
Rapid expansion and increased market presence
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What is unlikely to be a drawback of franchising as a model of growth?
The franchisor's image is at risk if a franchisee is unprofessional
Diseconomies of scale can arise
Entrepreneurial potential of franchisees is not fully utilized
Clash of corporate cultures
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Which option is least likely to be a benefit of multinational companies to a host nation in a less economically developed country?
They create jobs and boost gross domestic product
They facilitate knowledge and technology transfers
They are likely to operate more responsibly than local firms
They intensify domestic competition
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When a firm acquires another business that operates at a different stage in the chain of production, this is called _________ integration.
Vertical
Horizontal
Conglomerate
Multinational