30 Questions
What is the primary role of International Agents?
To market on behalf of a business in a specific country
What is the main characteristic of Turnkey Contracts?
They are used to establish large plants
What is the key reason companies set up Joint Ventures?
To gain entry to a foreign market
Which mode of entry involves charging a fee for the use of technology and expertise?
Licensing
What is the initial step often taken by organizations entering international marketing?
Contracting International Agents
What is the distinguishing factor of Strategic Alliances in international marketing?
They describe different relationships between companies marketing internationally
What is the main explanation for why developed and developing countries benefit from international trade?
Having a comparative advantage
What does eliminating tariffs on imports do?
Boosts domestic producers' competitiveness
Why is it often said that 'if goods do not cross frontiers, soldiers will'?
To highlight the connection between trade and peace
What is one reason some trade theorists believe free trade may not always provide the best solution?
Reducing domestic workers' productivity
Why are protectionism and unfair trade practices seen as beneficial for a country according to the text?
Providing greater economic benefit to the country
How does trade contribute to improving managers' productivity according to the text?
By diffusing new technologies and ideas
Which economic theories have discussed the concept of free trade?
Mercantilism, absolute advantage theory, comparative advantage theory
Who developed the theory of comparative advantage in international trade?
David Ricardo
What is the core idea behind the absolute advantage theory in international trade?
Countries should focus on producing goods they are best at producing
How does openness to trade promote economic growth according to the text?
By allowing countries to focus on their competitive advantage
Which of the following is NOT mentioned as a disadvantage of free trade in the text?
High government spending
What concept suggests that a country should specialize in producing goods where it has a lower opportunity cost compared to other countries?
Comparative advantage theory
What are some key risks involved in international business?
Local laws favoring local competition, foreign currency exchange rate fluctuations, and communication barriers
What is an advantage of engaging in a joint venture?
Increased productivity and greater profits
Which of the following is a disadvantage of a joint venture?
It takes time and effort to form the right relationship
What are some hidden costs mentioned in the text?
Expenses associated with customizing products
Which of the following is NOT a risk involved in international business according to the text?
Spreading risk with partners
What is one advantage of a joint venture mentioned in the text?
Access to new markets and new technology
What was the role of Italy in the development of Lex Mercatoria?
Italy played an important role in developing Lex Mercatoria.
How did Lex Mercatoria gain authority?
By voluntary acceptance from merchants.
What is the role of the International Chamber of Commerce (ICC)?
A non-governmental organization serving world business.
What did the emperors do when they gained more authority regarding Lex Mercatoria?
Integrated Lex Mercatoria into domestic legal systems.
In international trade and business law, what are the two main categories of treaties mentioned in the text?
Bilateral and multilateral treaties.
What is the purpose of compiling international mercantile usages by the ICC?
To ensure harmonization in international business transactions.
Test your knowledge on the different modes of entry into international markets such as Internet Exporting, Licensing, International Agents, Strategic Alliances, and more. Understand the stages of internalization and the concepts of Licensing and Franchising in an international business context.
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