Economics Chapter on Production and Trade
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Questions and Answers

Which of the following is NOT considered a factor of production?

  • Capital
  • Labor
  • Economy (correct)
  • Land

    • The goal of entrepreneurship is to minimize profit.

    False

    What are the two types of income associated with labor?

    Wages and Salaries

    Profit is calculated using the formula: Profit = total revenue - total ______.

    <p>cost</p> Signup and view all the answers

    Match the following categories of economic resources with their descriptions:

    <p>Land = Includes natural resources like farmland and water Labor = Human effort used in production Capital = Tools and equipment used for production Entrepreneurship = The ability to organize resources for profit</p> Signup and view all the answers

    What term describes goods and services brought into a domestic country?

    <p>Imports</p> Signup and view all the answers

    International trade only involves two parties within the same country.

    <p>False</p> Signup and view all the answers

    Name one advantage of international trade.

    <p>Increased revenues</p> Signup and view all the answers

    The process of crossing international borders and conducting transactions with two or more countries is known as __________.

    <p>globalization</p> Signup and view all the answers

    Match the following types of trade with their definitions:

    <p>Foreign Trade = Exchange of goods and services between countries Local Trade = Exchange of goods and services within one country Imports = Goods brought into a country Exports = Goods sold to a foreign country</p> Signup and view all the answers

    Which of the following is a disadvantage of international trade?

    <p>Cultural differences</p> Signup and view all the answers

    Decreased competition is an advantage of international trade.

    <p>False</p> Signup and view all the answers

    What is the economic advantage of international trade?

    <p>Access to a greater variety of goods and services and potential for higher profits.</p> Signup and view all the answers

    What does the demand curve represent?

    <p>The willingness of buyers to purchase at various prices</p> Signup and view all the answers

    An increase in consumer income typically decreases the demand for normal goods.

    <p>False</p> Signup and view all the answers

    Name one determinant of supply.

    <p>Change in the number of sellers</p> Signup and view all the answers

    ___ is the economic activity that transforms raw materials into finished goods.

    <p>Production</p> Signup and view all the answers

    Match the following economic activities with their descriptions:

    <p>Production = Transformation of raw materials into finished products Distribution = Allocation of commodities among owners Exchange = Transfer of money or trade between parties Consumption = Utilization of goods and services for satisfaction</p> Signup and view all the answers

    Which factor is NOT a cause of scarcity?

    <p>Technological advancements</p> Signup and view all the answers

    Natural resources are categorized as man-made resources.

    <p>False</p> Signup and view all the answers

    What defines economics?

    <p>The allocation of scarce resources to achieve unlimited consumer satisfaction.</p> Signup and view all the answers

    What is one of the features of international business?

    <p>Large scale operations</p> Signup and view all the answers

    International business does not encourage competition in domestic markets.

    <p>False</p> Signup and view all the answers

    Name one advantage of international business expansion.

    <p>Reaching new customers</p> Signup and view all the answers

    The Ethnocentric Approach views foreign markets as an extension of the ______.

    <p>domestic market</p> Signup and view all the answers

    Which factor is considered a disadvantage of international business expansion?

    <p>Foreign rules and regulations</p> Signup and view all the answers

    Match the following concepts with their definitions:

    <p>Integration of Economies = Combining economic systems across borders Keen Competition = High levels of competition among businesses Immobility of Factors = Restrictions on resources moving between countries Heterogeneous Markets = Diverse consumer preferences in different regions</p> Signup and view all the answers

    International business expansion generally leads to increased immunity to trends.

    <p>True</p> Signup and view all the answers

    What is one objective of international business?

    <p>To promote social and cultural exchange among nations</p> Signup and view all the answers

    <h1>=</h1> <h1>=</h1> Signup and view all the answers

    Study Notes

    Introduction to International Business and Trade

    • International trade is the exchange of goods or services between at least two countries.
    • Imports are goods or services brought into a country.
    • Exports are goods or services sold to a foreign country.
    • International trade allows countries to access a wider variety of goods and services.

    Reasons for International Trade

    • Reduced reliance on the local market
    • Increased chances of success
    • Increased efficiency
    • Increased productivity
    • Economic advantage
    • Innovation and growth
    • Uneven distribution of natural resources
    • Division of labor and specialization

    Advantages of International Trade

    • Increased revenue
    • Decreased competition
    • Longer product lifespan
    • Easier cash flow management
    • Better risk management
    • Benefiting from currency exchange
    • Access to export financing
    • Disposal of surplus goods
    • Enhanced reputation
    • Opportunity to specialize

    Disadvantages of International Trade

    • Shipping customs and duties
    • Language barriers
    • Cultural differences
    • Servicing customers
    • Returning products
    • Intellectual property theft

    Kinds of Trade

    • Foreign Trade/International Trade: Exchange of goods and services between countries.
    • Local Trade/Domestic Trade: Exchange of goods and services within a single country (e.g., within the Philippines).

    Importation and Exportation

    • Export: Products transported to other countries (sold).
    • Import: Products transported into a country (bought).

    International Trade Explained

    • Local Trade/Domestic Trade: Exchange of goods and services within a single nation (e.g., Baguio strawberries, Davao durian).
    • Globalization: Cross-border transactions with multiple countries.
    • International Trade: Promotes competition and market access to goods/services not readily available domestically.

    Supply and Demand

    • Demand: Buyers' willingness to purchase various goods/services at varying prices in a specific time and place.
    • Supply: Producers'/sellers' perspective on goods/services availability.

    Demand Curve Determinants

    • Price expectations
    • Number of buyers
    • Prices of related goods (substitution and complementary goods)
    • Changes in consumer income

    Supply Determinants

    • Number of sellers
    • Production cost
    • Technology
    • Price expectations
    • Calamities
    • Taxes and subsidies

    Economics and Economic Activities

    • Economics: The allocation of scarce resources to satisfy unlimited consumer needs.
    • Production: Transforming inputs (raw materials) into finished goods/services.
    • Distribution: The systematic process of resource and income allocation.
    • Exchange: Transferring money or goods/services between buyers and sellers.
    • Consumption: Utilizing goods/services to meet consumer needs.

    Fundamental Economic Concepts

    • Unlimited satisfaction: Consumers constantly seek more products/resources.
    • Limited resources: The scarcity of resources.
    • Proper resource allocation: Finding ways to utilize available resources effectively to satisfy consumers.

    Kinds of Resources

    • Man-made resources
    • Human resources
    • Natural resources

    Factors Causing Scarcity

    • Population increase: Higher consumption of resources.
    • Increase in businesses: Need for more resources.
    • Advancement in technology: Increased consumption and usage of resources.
    • Unsatisfied needs: Continuous quest for enhanced living standards.
    • Illegal activities: Imbalances in resource distribution.

    Economic Resources/Factors of Production

    • Land: Physical space and natural resources for production.
    • Labor: Workforce involved in production.
    • Capital: Tools, equipment, and money used for production.
    • Entrepreneurship: Combining land, labor, and capital to produce goods/services (profit maximization).

    Types of Income (Labor)

    • Wages: Income earned from blue-collar jobs.
    • Salaries: Income earned from white-collar jobs.

    International Business

    • International business: Trading goods, services, technology, capital, or knowledge across national borders.
    • Cross-border transactions between countries.
    • Factors like capital, human skills, and resources move to produce physical goods and services.

    Features of International Business

    • Flow of capital across countries
    • Need for accurate and timely information
    • Market expansion opportunities
    • Increased potential compared to domestic markets
    • Market segmentation (different markets)
    • Large-scale operations
    • Economic integration

    Importance of International Business

    • Increased competition in domestic markets
    • Access to new opportunities in foreign markets
    • Encourages companies to innovate and become more efficient
    • Provides consumers with access to diverse goods and services.

    Objectives of International Business

    • Promoting social and cultural exchange among nations
    • Supporting the economic and industrial growth of developing countries by opening them up to global markets.
    • Sustainable resource management and fair distribution across countries.

    Features of International Business Operations

    • Large-scale operations
    • Factors immobility
    • Heterogeneous markets
    • Integration of economies
    • Prevalence of developed nations
    • Benefits for participating countries
    • Keen competition
    • Key role of science and technology
    • International trade restrictions
    • Sensitive nature of markets
    • Different policies and currencies
    • Removal of trade barriers and development of trading blocs

    Advantages of International Business Expansion

    • Reaching new customers
    • Spreading business risks
    • Accessing talent
    • Boosting the brand
    • Attracting foreign investment
    • Lowering costs
    • Increased immunity to trends
    • Enhanced consumer trust

    Disadvantages of International Business Expansion

    • Foreign rules and regulations
    • Logistic challenges
    • Language barriers
    • Time zone coordination
    • Currency fluctuations
    • Credit risk management
    • Foreign political factors
    • Market research needs

    Domestic vs. International Business

    • Domestic Business: Conducted within a country's borders.
    • International Business: Crosses national borders.
    • Tariff rates have a direct impact on international trade.
    • Culture influences business operations.
    • Foreign exchange rates directly affect international business operations.

    International Business Approaches

    • Ethnocentric: Domestic strategies applied to foreign markets.
    • Polycentric: Strategies tailored to each foreign market's unique environment.
    • Regiocentric: Regional strategies for similar countries in a region.
    • Geocentric: Unified global strategies for all markets.

    Ethical Issues in International Business

    • Variation in ethical standards between nations
    • Important ethical considerations in multinational businesses: employment practices, human rights, environmental protection, corruption.
    • Moral obligations of international corporations

    Additional Notes

    • There is no explicit mention of modules or specific pages in the provided text.
    • These notes summarize the information across the provided images.

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    Related Documents

    CAE 323 Module 1: Introduction to International Business and Trade PDF

    Description

    This quiz covers essential concepts in economics, including factors of production, types of income related to labor, and the impact of international trade. Test your understanding of economic resources, profit calculations, and the advantages and disadvantages of trade between nations. Perfect for students studying introductory economics.

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