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Exam 3: Competing in Global Markets

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Question 81

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Country A is an extremely efficient producer of tin.However,its climate and terrain makes it difficult to produce corn.According to the theory of comparative advantage,Country A should:

A) produce both tin and corn in order to remain self-sufficient.
B) import the resources needed to produce corn.
C) concentrate its production on tin and buy corn from an efficient producer.
D) watch the global market to see which product brings the highest price.

E) A) and D)
F) A) and C)

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Question 82

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The hurdles to success are generally in global markets than domestic markets.

A) The same.
B) Lower.
C) Getting lower.
D) Higher.

E) C) and D)
F) A) and B)

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Question 83

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Only large firms have the resources needed to successfully compete in the global environment.

Export trading companies help to match buyers and sellers from different countries.

The country of Urbanistan exports $250 of goods and services and imports $170 of goods and services.Urbanistan has an unfavourable balance of trade of $80.

Profitable opportunities in the global markets are diminishing for small and medium sized businesses.

The EU began in 1993.

A major step in European unification was the adoption of the Euro.

The country where a parent firm is located is called the home country.

A Canadian franchise example is Tim Hortons.

Exporting involves the selling of products to another country.

All of the following are advantages of free trade except:

In measuring the effectiveness of global trade,nations carefully follow which two key indicators?

What is the primary advantage of a subsidiary?

According to the theory of comparative advantage,a country should buy from other countries those goods it produces most efficiently.

A(n) _______refers to a complete ban of the imports or exports of certain products from a specific country.

The nation of Redland reported that their imports for the previous year were $4 billion greater than its exports.During the same period,Redland reported a favourable balance of payments.This information suggests:

In supporting free trade,Canada wants to make sure that global trade is conducted fairly.To ensure a level playing field,countries enforce laws to prohibit unfair practices such as dumping.How does dumping benefit foreign firms and purchasers?

When trading in global markets,most countries prefer to import more than they export.

In measuring the effectiveness of global trade,countries look at the balance of trade and GDP.