Economics and Environmental Management Quiz

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What is the primary purpose of pollution permits?

To eliminate all pollution from businesses

To allow businesses to pollute to a certain level while managing external costs (correct)

To encourage businesses to pollute more

To reduce the cost of production for businesses

Social costs are equal to private costs only.

False

What is a primary advantage of multinational companies (MNCs) for host countries?

Higher import taxes

Profits flow out of the country

Increase in local expertise (correct)

Decrease in job opportunities

Import quotas can lead to higher prices for domestic products.

True Signup and view all the answers

Name one way businesses can ensure sustainable development.

Use of renewable energy Signup and view all the answers

Name one negative impact of multinational companies on host countries.

Depletion of scarce resources Signup and view all the answers

Social benefits are calculated as external benefits plus __________ benefits.

private Signup and view all the answers

Match the following concepts with their definitions:

Private Costs = Costs paid directly by a business or consumer External Costs = Costs incurred by society due to business activities Private Benefits = Gains received directly by a business or consumer External Benefits = Gains that benefit society beyond individual businesses Signup and view all the answers

A company that has factories or service operations in more than one country is known as a __________.

multinational company Signup and view all the answers

Which of the following is considered an external cost?

Pollution affecting local communities Signup and view all the answers

One of the disadvantages of multinational companies to host countries is:

Profits flowing out of the country Signup and view all the answers

Deregulation can lead to increased competition in the market.

True Signup and view all the answers

Higher export levels can improve the international competitiveness of a host country's economy.

True Signup and view all the answers

What ethical issue does offering business to government officials represent?

Corruption Signup and view all the answers

Match the following concepts with their definitions:

Import Quotas = Limit the quantity of goods that can be imported MNCs = Companies operating in multiple countries Domestic Businesses = Local firms affected by international competition Depletion of Resources = Exhaustion of natural materials Signup and view all the answers

What is one effect of import quotas on domestic businesses?

Increased sales for domestic products Signup and view all the answers

What is one effect of multinationals setting up operations in a home country?

Local businesses may have to improve their competitiveness. Signup and view all the answers

Multinationals only benefit themselves and do not impact local firms.

False Signup and view all the answers

What motivates employees to stay with their current businesses when facing competition from multinationals?

Motivational methods Signup and view all the answers

Multinationals may have more ________ in hiring the best employees.

resources Signup and view all the answers

Which group of employees is likely to leave a business struggling to compete?

Employees with in-demand skills. Signup and view all the answers

Increased investment from multinationals is always harmful to the local economy.

False Signup and view all the answers

How can local businesses respond to competition from multinationals?

By improving their competitiveness and using motivational methods. Signup and view all the answers

Match the following outcomes with their effects on local firms:

Increased competition = Encourages improvement and innovation Higher wages from multinationals = Increases employee turnover in local businesses Economies of scale = Lower production costs for larger firms Investment in local economies = Potential for job growth Signup and view all the answers