Bus 410 Midterm 1 N UPDATED ACTUAL
Exam Questions and CORRECT Answers
3 forms of international business - CORRECT ANSWER -trade, licensing and direct
investment
Trade - CORRECT ANSWER -import/export/trade-in services
direct export - CORRECT ANSWER -exporter assumes responsibility for most of the
export functions
indirect export - CORRECT ANSWER -Using intermediaries to handle exports (i.e. export
trading companies and export management companies)
International trading companies - CORRECT ANSWER -Middlemen who bring buyers
and sellers together by specializing in all aspects of import/export transactions
licensing - CORRECT ANSWER -renting intellectual property in exchange for royalties
(in franchising, one must adhere to all rules of base company)
Direct investment - CORRECT ANSWER -go into country and start a business
Tarbert Trading Ltd. v. Cometals, inc - CORRECT ANSWER -Case about red beans that
originated in Africa but were said to have been from the EEU. Claim and counterclaim were
dismissed because agreements that violate the law are void
Russian entertainment wholesale, Inc. v. Close-Up international, inc. - CORRECT
ANSWER -Judgement affirmed for the defendant. Close-Up could not sue Image for
distributing multi-lingual DVDs, saying that they were committing copyright infringement,
because their rights were limited to just selling the Russian version.
,WIPO - CORRECT ANSWER -World Intellectual Property Org; specialized agency of the
United Nations - develops IP policies, coordinates registrations in some IP areas, resolves
disputes
WTO - CORRECT ANSWER -World Trade Org; a more uniform application and
enforcement of their national IP laws - their dispute settlement body resolves issues between
governments
Transfer of technology - CORRECT ANSWER -sharing of scientific info, technology, and
manufacturing know-how between firms, universities or other institutions; accomplished through
complex licensing agreements (e.g. patents)
Foreign branch - CORRECT ANSWER -operations in the home country, but may be a
branch office or whole network system in foreign country
States cannot tax _____ (imports/exports) and the fed cannot tax _____ (imports/exports) -
CORRECT ANSWER -either; exports
foreign subsidiary - CORRECT ANSWER -foreign subsidiary: company under laws of the
host country, but owned and controlled by parent company in home country
joint venture - CORRECT ANSWER -cooperative business arrangement between two or
more companies for profit, may take the form of a partnership or corporation
Case: Union carbide corp gas Plant Disaster at Bhopal - CORRECT ANSWER -poisonous
chemicals leaked from a subsidiary in India to an American corporation, court upheld that the
lawsuit be held in India by forum non conveniens
Transatlantic Financing Corp. v. United States - CORRECT ANSWER -Iran sued for the
cargo ship taking a longer than expected route, however court affirmed for the United States
because they had not previously agreed on the route (1) and because the ship had no choice once
it found out about the war time blockade (2).
, Gaskin v. Stumm Handel GMBH - CORRECT ANSWER -Gaskin, a US citizen, tried to
sue in a US court claiming that he could not read the german contract when signing it stating that
problems had to be resolved in a German court, but the suit was dismissed
Tariff - CORRECT ANSWER -import duty or tax imposed on goods entering the customs
territory of a nation
non-tarriff barriers - CORRECT ANSWER -laws or administrative regulations that have
the effect of restricting access of foreign goods or services to a domestic market
quota: - CORRECT ANSWER -direct non-tarriff barrier; restricts how many units of an
import that may enter a country; international trade laws today restrict the use of quotas except in
very limited circumstances
Bernina Distributors v. Bernina Sewing Machine Co. - CORRECT ANSWER -Importer
had assumed exchange rate risk; cost increases and currency fluctuations alone do not render a
contract too "impractable" to perform
Currency controls: - CORRECT ANSWER -prohibiting residents from making payments
in foreign currency, any foreign payments unless on gov approval or through authorized bank
accounts, the removal of foreign currency by those traveling, and the exchange of foriegn
currency for local currency at other than the official rate of exchange
DIP SpA v. Comune di Bassano del Grappa - CORRECT ANSWER -foreign law risk;
Italian law required licensing for certain practices, upheld to German company who filed suit
expropriation - CORRECT ANSWER -taking by a government of privately owned assets
with some compensation
confescation - CORRECT ANSWER -taking by a government of privately owned assets
without compensation
Exam Questions and CORRECT Answers
3 forms of international business - CORRECT ANSWER -trade, licensing and direct
investment
Trade - CORRECT ANSWER -import/export/trade-in services
direct export - CORRECT ANSWER -exporter assumes responsibility for most of the
export functions
indirect export - CORRECT ANSWER -Using intermediaries to handle exports (i.e. export
trading companies and export management companies)
International trading companies - CORRECT ANSWER -Middlemen who bring buyers
and sellers together by specializing in all aspects of import/export transactions
licensing - CORRECT ANSWER -renting intellectual property in exchange for royalties
(in franchising, one must adhere to all rules of base company)
Direct investment - CORRECT ANSWER -go into country and start a business
Tarbert Trading Ltd. v. Cometals, inc - CORRECT ANSWER -Case about red beans that
originated in Africa but were said to have been from the EEU. Claim and counterclaim were
dismissed because agreements that violate the law are void
Russian entertainment wholesale, Inc. v. Close-Up international, inc. - CORRECT
ANSWER -Judgement affirmed for the defendant. Close-Up could not sue Image for
distributing multi-lingual DVDs, saying that they were committing copyright infringement,
because their rights were limited to just selling the Russian version.
,WIPO - CORRECT ANSWER -World Intellectual Property Org; specialized agency of the
United Nations - develops IP policies, coordinates registrations in some IP areas, resolves
disputes
WTO - CORRECT ANSWER -World Trade Org; a more uniform application and
enforcement of their national IP laws - their dispute settlement body resolves issues between
governments
Transfer of technology - CORRECT ANSWER -sharing of scientific info, technology, and
manufacturing know-how between firms, universities or other institutions; accomplished through
complex licensing agreements (e.g. patents)
Foreign branch - CORRECT ANSWER -operations in the home country, but may be a
branch office or whole network system in foreign country
States cannot tax _____ (imports/exports) and the fed cannot tax _____ (imports/exports) -
CORRECT ANSWER -either; exports
foreign subsidiary - CORRECT ANSWER -foreign subsidiary: company under laws of the
host country, but owned and controlled by parent company in home country
joint venture - CORRECT ANSWER -cooperative business arrangement between two or
more companies for profit, may take the form of a partnership or corporation
Case: Union carbide corp gas Plant Disaster at Bhopal - CORRECT ANSWER -poisonous
chemicals leaked from a subsidiary in India to an American corporation, court upheld that the
lawsuit be held in India by forum non conveniens
Transatlantic Financing Corp. v. United States - CORRECT ANSWER -Iran sued for the
cargo ship taking a longer than expected route, however court affirmed for the United States
because they had not previously agreed on the route (1) and because the ship had no choice once
it found out about the war time blockade (2).
, Gaskin v. Stumm Handel GMBH - CORRECT ANSWER -Gaskin, a US citizen, tried to
sue in a US court claiming that he could not read the german contract when signing it stating that
problems had to be resolved in a German court, but the suit was dismissed
Tariff - CORRECT ANSWER -import duty or tax imposed on goods entering the customs
territory of a nation
non-tarriff barriers - CORRECT ANSWER -laws or administrative regulations that have
the effect of restricting access of foreign goods or services to a domestic market
quota: - CORRECT ANSWER -direct non-tarriff barrier; restricts how many units of an
import that may enter a country; international trade laws today restrict the use of quotas except in
very limited circumstances
Bernina Distributors v. Bernina Sewing Machine Co. - CORRECT ANSWER -Importer
had assumed exchange rate risk; cost increases and currency fluctuations alone do not render a
contract too "impractable" to perform
Currency controls: - CORRECT ANSWER -prohibiting residents from making payments
in foreign currency, any foreign payments unless on gov approval or through authorized bank
accounts, the removal of foreign currency by those traveling, and the exchange of foriegn
currency for local currency at other than the official rate of exchange
DIP SpA v. Comune di Bassano del Grappa - CORRECT ANSWER -foreign law risk;
Italian law required licensing for certain practices, upheld to German company who filed suit
expropriation - CORRECT ANSWER -taking by a government of privately owned assets
with some compensation
confescation - CORRECT ANSWER -taking by a government of privately owned assets
without compensation
