BUS 101 EXAM 2 (CH 6-9) QUESTIONS WITH
COMPLETE VERIFIED SOLUTIONS
goods and services produced domestically but sold in other countries - answer ✔✔-Exports
goods or services produced in another country but purchased domestically - answer ✔✔-Imports
the difference between a country's total exports and total imports
= exports - imports - answer ✔✔-balance of trade
a balance of trade is negative
imports>exports = negative balance of trade - answer ✔✔-trade deficit
the idea that countries and businesses should specialize in the production of goods in which they have a
lower opportunity cost - answer ✔✔-comparative advantage
when a country can produce a product more efficiently than others (less inputs/cheaply) - raw
productivity - answer ✔✔-absolute advantage
when large industrialized nations seek to set up factories or offices abroad, they will often look for the
cheapest option in terms of resources and labor that offers the land and material access they require -
answer ✔✔-pollution haven
Occurs when a firm (the licensor) allows a foreign company (the licensee) to produce its products and
utilize it trademarks for a royalty fee - answer ✔✔-Licensing
allows the franchisee to utilize the business name and sell the product in a given market area - answer
✔✔-international franchise
, allows for more control in accessing international markets by simply allowing a foreign company the
ability to produce their product - answer ✔✔-contract manufacturing
A special type of partnership between two or more companies in different countries- sharing many parts
of the business: technology, costs, profits, and risks. the partners gain access to new markets with the
added advantage of local knowledge and managerial style - answer ✔✔-international joint ventures
A less formal partnership - firms gain access to new markets and create mutually beneficial advantages.
done without the sharing of profits and risks - answer ✔✔-international strategic alliance
the purchase of permanent capital goods, such as a manufacturing factory or a business in a different
country - answer ✔✔-Foreign direct investment
when a parent company in the home country purchases a company in another country - answer ✔✔-
foreign subsidiary
products that are not easily tradable due to their inherent characteristics - answer ✔✔-non-tradable
goods and services
a barrier instituted by a government entity designed to shield domestic industries and their workers
from global competition - answer ✔✔-trade protection
Taxes on imported goods - answer ✔✔-tariffs
a restriction on the overall quantity of a certain good that can be imported into a country - answer ✔✔-
quota
a form of restrictive trade where barriers to trade are set up and take a form other than a tariff - answer
✔✔-non-tariff barriers
a forum for nations to negotiate the rules of international trade, with the overall purpose of the
organization being to facilitate a harmonious flow of global trade - answer ✔✔-World Trade
Organization (WTO)
COMPLETE VERIFIED SOLUTIONS
goods and services produced domestically but sold in other countries - answer ✔✔-Exports
goods or services produced in another country but purchased domestically - answer ✔✔-Imports
the difference between a country's total exports and total imports
= exports - imports - answer ✔✔-balance of trade
a balance of trade is negative
imports>exports = negative balance of trade - answer ✔✔-trade deficit
the idea that countries and businesses should specialize in the production of goods in which they have a
lower opportunity cost - answer ✔✔-comparative advantage
when a country can produce a product more efficiently than others (less inputs/cheaply) - raw
productivity - answer ✔✔-absolute advantage
when large industrialized nations seek to set up factories or offices abroad, they will often look for the
cheapest option in terms of resources and labor that offers the land and material access they require -
answer ✔✔-pollution haven
Occurs when a firm (the licensor) allows a foreign company (the licensee) to produce its products and
utilize it trademarks for a royalty fee - answer ✔✔-Licensing
allows the franchisee to utilize the business name and sell the product in a given market area - answer
✔✔-international franchise
, allows for more control in accessing international markets by simply allowing a foreign company the
ability to produce their product - answer ✔✔-contract manufacturing
A special type of partnership between two or more companies in different countries- sharing many parts
of the business: technology, costs, profits, and risks. the partners gain access to new markets with the
added advantage of local knowledge and managerial style - answer ✔✔-international joint ventures
A less formal partnership - firms gain access to new markets and create mutually beneficial advantages.
done without the sharing of profits and risks - answer ✔✔-international strategic alliance
the purchase of permanent capital goods, such as a manufacturing factory or a business in a different
country - answer ✔✔-Foreign direct investment
when a parent company in the home country purchases a company in another country - answer ✔✔-
foreign subsidiary
products that are not easily tradable due to their inherent characteristics - answer ✔✔-non-tradable
goods and services
a barrier instituted by a government entity designed to shield domestic industries and their workers
from global competition - answer ✔✔-trade protection
Taxes on imported goods - answer ✔✔-tariffs
a restriction on the overall quantity of a certain good that can be imported into a country - answer ✔✔-
quota
a form of restrictive trade where barriers to trade are set up and take a form other than a tariff - answer
✔✔-non-tariff barriers
a forum for nations to negotiate the rules of international trade, with the overall purpose of the
organization being to facilitate a harmonious flow of global trade - answer ✔✔-World Trade
Organization (WTO)
