Introduction to Globalization
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Questions and Answers

What is the correct order of the stages in the Product Life Cycle (PLC)?

  • Introduction, Maturity, Growth, Decline
  • Growth, Introduction, Decline, Maturity
  • Maturity, Growth, Introduction, Decline
  • Introduction, Growth, Maturity, Decline (correct)

    • The 'Decline' stage of a product's life cycle results in increasing sales.

    False

    What does IPLC stand for, and why is it important?

    International Product Life Cycle, it recognizes that a product can be in different stages in different countries.

    _________ are the first individuals to adopt new ideas and are characterized as risk-takers.

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

    Match the following product life cycle stages with their descriptions:

    <p>Introduction = Sales increase gradually with fairly low sales. Growth = Sales rise sharply as more consumers buy the product. Maturity = Sales reach their highest peak and then decrease. Decline = Sales deteriorate as the product approaches its end.</p> Signup and view all the answers

    According to the principles of risk, what will happen if you have less risk?

    <p>You will pay higher interest rate</p> Signup and view all the answers

    Gordon Moore's law states that the power of electronics doubles every three years.

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

    What is the average lifespan of electronics according to the given content?

    <p>4.5 years</p> Signup and view all the answers

    The total cost of producing a product is the sum of variable costs and __________.

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

    Match the following terms with their definitions:

    <p>Risk = Higher borrowing cost with better credit score Fixed costs = Costs that do not change with production levels Variable costs = Costs that vary based on production/utility use Cost per unit = Total cost divided by the number of units produced</p> Signup and view all the answers

    If Ikea increases its annual production from 500K chairs to 5M chairs without changing the customer's price, how will this affect the cost per unit?

    <p>Cost per unit will decrease</p> Signup and view all the answers

    Risk diversification means increasing risk by concentrating investments in a single asset.

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

    What is the new total per unit cost after spreading fixed costs over more units?

    <p>$8.2</p> Signup and view all the answers

    A company with high psychic distance will find it easy to sell products between countries.

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

    What is an example of a reactive driver of international business?

    <p>Competitive pressures in the local market</p> Signup and view all the answers

    The cost incurred by firms operating outside their home country, above those incurred by local firms, is known as the _________.

    <p>Liability of Foreignness</p> Signup and view all the answers

    Which of the following is NOT a reactive driver of international business?

    <p>Proactive market strategy</p> Signup and view all the answers

    What happens to the profit margin when there is overcapacity in a market?

    <p>It decreases</p> Signup and view all the answers

    Seasonal products can be marketed year-round by selling in countries with opposite seasons.

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

    Higher transaction costs, such as ___, can contribute to the liability of foreignness.

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

    What approach aims to enrich a country by restraining imports and encouraging exports?

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

    Absolute advantage means a country can produce all goods more efficiently than others.

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

    What is the primary purpose of the World Trade Organization (WTO)?

    <p>To open and facilitate international trade.</p> Signup and view all the answers

    The condition when the price of a product sold in the importing country is less than the price in the exporting country is known as _____ pricing.

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

    Match each term related to international trade with its correct description:

    <p>GATT = Agreement to liberalize trade and reduce barriers IMF = Organization promoting international monetary cooperation Trade Barrier = Obstacles that impede trade Comparative Advantage = Ability to produce a good at a lower opportunity cost</p> Signup and view all the answers

    What is considered a non-tariff barrier?

    <p>Import quotas</p> Signup and view all the answers

    The General Agreement on Tariffs and Trade (GATT) was superseded by the World Bank in 1995.

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

    What does the term 'opportunity cost' refer to?

    <p>What is given up to obtain something else.</p> Signup and view all the answers

    Countries with a competitive edge in producing specific goods focus on that good due to _____ advantage.

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

    Which of the following is NOT a principle of the trading system?

    <p>Centrally Planned Economy</p> Signup and view all the answers

    Which of the following is NOT a function of toys mentioned?

    <p>Promoting physical health</p> Signup and view all the answers

    Cultural differences do not influence a product's characteristics.

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

    What are the components of a cultural framework?

    <p>Values, Aesthetics, Language</p> Signup and view all the answers

    In communication, ____ cues such as facial expressions and hand gestures are important.

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

    Match the cultural components with their definitions:

    <p>Values = Ideas about what a group views as good, right, and desirable Aesthetics = Beauty and good taste in the arts and culture Language = Both spoken and unspoken communication forms</p> Signup and view all the answers

    Which of the following statements about cultural beliefs is true?

    <p>Beliefs are a set of assumptions held to be true by a group.</p> Signup and view all the answers

    The colors used in branding always convey the same message regardless of local culture.

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

    What role does an empathic view play in understanding another culture?

    <p>It helps to develop an objective understanding.</p> Signup and view all the answers

    Which cultural component includes behaviors that are socially acceptable?

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

    The 'okay' hand gesture is considered a good sign in the US, but it is a ____ gesture in Brazil.

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

    Study Notes

    Introduction to Globalization

    • Globalization is the process of countries becoming economically interdependent and integrated.
    • Manifestations include cross-border movements of goods, people, and capital.
    • Outward FDI = US direct investment abroad
    • Inward FDI = foreign direct investment in the US

    Why study International Business (IB)?

    • Business practices differ across countries.
    • Currency fluctuations affect international trade.
    • Customer needs vary by country.
    • Different solutions to the same problems.
    • Companies must adapt their products and services for international markets.
    • "Don't find customers for your products, find products for your customers" - Seth Godin

    International Business Activities

    • Output side: final product
    • Input side: raw materials/production process
    • Firms establish home/source countries and target/destination countries.

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    Description

    This quiz explores the concept of globalization, emphasizing how countries become economically interdependent and the factors that influence international business. It highlights the importance of understanding different business practices, currency fluctuations, and adapting to customer needs on a global scale.

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