When a company wants to be compensated in a foreign subsidiary beyond its contribution in capital and managerial resources, it often ________.
A) licenses intangible property to its subsidiary
B) negotiates a special agreement with the host government
C) establishes a management contract
D) sets up an equity alliance
Question 2How does opportunity cost relate to comparative advantage? In a short essay, explain the connection between the two terms and provide an example for illustration.
What will be an ideal response?
Question 3Which of the following questions would most likely be more important for OTC managers to evaluate when making the decision whether to export their towels to Earth Waves?
A) What are the risks involved in exporting OTC towels to Earth Waves?
B) Do Canadian towel companies have success when they export?
C) Will OTC save money on domestic marketing by exporting?
D) How intense is the organic food and clothing industry in Canada?
Question 4Johnson Enterprises manufactures computer chips used in cell phones. The MNE has long production runs that lower the per unit cost of each chi
A) economies of scale
B) the cluster effect
C) digitization
D) location economies
Question 5Global ad agencies differ from other types of advertising agencies primarily because they ________.
A) concentrate on targeting local consumers and markets
B) have a deep knowledge of consumer characteristics in individual countries
C) have affiliates and offices in target markets
D) are not usually subject to advertising regulations imposed by national governments
Question 6Which of the following is an advantage for firms that adapt a marketing program for an individual market?
A) Firms will rely less heavily on foreign market intermediaries for large sales.
B) Customers will have numerous products and services from which to choose.
C) Products and services will specifically meet the needs of customers in that market.
D) Governments will be more flexible towards firms that modify products and services.
Question 7All of the following are reasons that firms might adapt their products or services except ________.
A) low consumer confidence
B) local packaging laws
C) consistent global brand
D) distinct cultural practices
Question 8Adaptation is more costly than standardization because ________.
A) the firm is likely to lose customers when products are too adapted
B) products must be redesigned for numerous foreign markets
C) governments require firms to pay fees for altered products
D) intermediaries charge high commissions in foreign markets
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