Modes of Entry into International Markets Quiz
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Questions and Answers

What is the primary role of International Agents?

  • To provide training and development for key employees
  • To market on behalf of a business in a specific country (correct)
  • To own a proportion of new businesses in international markets
  • To set up joint ventures in foreign markets

    • What is the main characteristic of Turnkey Contracts?

  • They focus on strategic alliances
  • They primarily involve international sales subsidiaries
  • They involve licensing agreements
  • They are used to establish large plants (correct)

    • What is the key reason companies set up Joint Ventures?

  • To establish licensing agreements
  • To gain entry to a foreign market (correct)
  • To access international distributors
  • To engage in internet exporting

    • Which mode of entry involves charging a fee for the use of technology and expertise?

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

    What is the initial step often taken by organizations entering international marketing?

    <p>Contracting International Agents</p> Signup and view all the answers

    What is the distinguishing factor of Strategic Alliances in international marketing?

    <p>They describe different relationships between companies marketing internationally</p> Signup and view all the answers

    What is the main explanation for why developed and developing countries benefit from international trade?

    <p>Having a comparative advantage</p> Signup and view all the answers

    What does eliminating tariffs on imports do?

    <p>Boosts domestic producers' competitiveness</p> Signup and view all the answers

    Why is it often said that 'if goods do not cross frontiers, soldiers will'?

    <p>To highlight the connection between trade and peace</p> Signup and view all the answers

    What is one reason some trade theorists believe free trade may not always provide the best solution?

    <p>Reducing domestic workers' productivity</p> Signup and view all the answers

    Why are protectionism and unfair trade practices seen as beneficial for a country according to the text?

    <p>Providing greater economic benefit to the country</p> Signup and view all the answers

    How does trade contribute to improving managers' productivity according to the text?

    <p>By diffusing new technologies and ideas</p> Signup and view all the answers

    Which economic theories have discussed the concept of free trade?

    <p>Mercantilism, absolute advantage theory, comparative advantage theory</p> Signup and view all the answers

    Who developed the theory of comparative advantage in international trade?

    <p>David Ricardo</p> Signup and view all the answers

    What is the core idea behind the absolute advantage theory in international trade?

    <p>Countries should focus on producing goods they are best at producing</p> Signup and view all the answers

    How does openness to trade promote economic growth according to the text?

    <p>By allowing countries to focus on their competitive advantage</p> Signup and view all the answers

    Which of the following is NOT mentioned as a disadvantage of free trade in the text?

    <p>High government spending</p> Signup and view all the answers

    What concept suggests that a country should specialize in producing goods where it has a lower opportunity cost compared to other countries?

    <p>Comparative advantage theory</p> Signup and view all the answers

    What are some key risks involved in international business?

    <p>Local laws favoring local competition, foreign currency exchange rate fluctuations, and communication barriers</p> Signup and view all the answers

    What is an advantage of engaging in a joint venture?

    <p>Increased productivity and greater profits</p> Signup and view all the answers

    Which of the following is a disadvantage of a joint venture?

    <p>It takes time and effort to form the right relationship</p> Signup and view all the answers

    What are some hidden costs mentioned in the text?

    <p>Expenses associated with customizing products</p> Signup and view all the answers

    Which of the following is NOT a risk involved in international business according to the text?

    <p>Spreading risk with partners</p> Signup and view all the answers

    What is one advantage of a joint venture mentioned in the text?

    <p>Access to new markets and new technology</p> Signup and view all the answers

    What was the role of Italy in the development of Lex Mercatoria?

    <p>Italy played an important role in developing Lex Mercatoria.</p> Signup and view all the answers

    How did Lex Mercatoria gain authority?

    <p>By voluntary acceptance from merchants.</p> Signup and view all the answers

    What is the role of the International Chamber of Commerce (ICC)?

    <p>A non-governmental organization serving world business.</p> Signup and view all the answers

    What did the emperors do when they gained more authority regarding Lex Mercatoria?

    <p>Integrated Lex Mercatoria into domestic legal systems.</p> Signup and view all the answers

    In international trade and business law, what are the two main categories of treaties mentioned in the text?

    <p>Bilateral and multilateral treaties.</p> Signup and view all the answers

    What is the purpose of compiling international mercantile usages by the ICC?

    <p>To ensure harmonization in international business transactions.</p> Signup and view all the answers

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