MQM 385 Actual Questions and Correct Answers
Q1
Which of the following has occurred in international trade over the past half-century? There has
been a dramatic lowering of barriers to international trade. Tariff rates on manufactured goods
traded by advanced nations have fallen. Regulations prohibiting foreign companies from
entering domestic markets and establishing production facilities have been removed. The
volume of world trade has increased dramatically. All of these choices.
Answer: e. All of these choices
Q2
The globalization of production has allowed firms to increase their market share. lower their
cost structure. respond to individual market segments. avoid international competition. all of
these choices.
Answer: b. lower their cost structure
Q3
When a company increases its growth rate by taking goods or services developed at home and
selling them internationally, it is leveraging its existing products. taking the path of least
resistance. engaging in product positioning. realizing cost economies from global expansion.
realizing location economies.
Answer: a. leveraging its existing products
Q4
When a company expands its sales volume through international expansion, it can realize cost
savings from economies of scale through all of the following except spreading fixed costs over
its global sales volume. utilizing its production facilities more intensely. increased bargaining
power with its suppliers. learning effects associated with higher volume. improved
responsiveness.
Answer: e. improved responsiveness
Q5
When a company performs a value creation activity in the optimal location for that activity,
wherever in the world that might be, it is trying to capitalize on economies of scale. economies
of scope. the transnational strategy. location economies. its localization strategy.
Answer: d. location economies
, Q6
Which of the following is
Answer: c. The firm must be pursuing a strategy of
Q7
Global expansion
Answer: b. can enable companies to increase their profitability and grow their profits
more rapidly.
Q8
The ability to realize cost
Answer: b. commodity-type products that serve universal
Q9
In 1952, the Iranian oil industry was nationalized so that foreign ownership of oil-producing land
and equipment was made illegal and the assets were confiscated. Which of the following
disadvantages of global expansion is shown in this example? Political risk Increased tariffs
Lower costs for labor and raw materials Commodity products that command low profits
Products that need to be customized to local requirements
Answer: a. Political risk
Q10
Dell is expanding its market share in European countries because its direct-sales model is more
effective than the business model used by its European rivals. Which of the following benefits of
global expansion is Dell experiencing, relative to its competitors? Lower costs for labor and raw
materials Further exploitation of distinctive competencies Decreased political and economic risk
Better realization of location economies More incentive for local subsidiaries to develop
competencies
Answer: b. further exploitation of distinctive compentences
Q11
Which of the following factors increases pressures for cost reductions? Differences in
distribution channels Increasing national wealth Great transportation needs High switching
costs Price as the main competitive weapon in a market
Answer: e. Price as the main competitive weapon in a market
Q1
Which of the following has occurred in international trade over the past half-century? There has
been a dramatic lowering of barriers to international trade. Tariff rates on manufactured goods
traded by advanced nations have fallen. Regulations prohibiting foreign companies from
entering domestic markets and establishing production facilities have been removed. The
volume of world trade has increased dramatically. All of these choices.
Answer: e. All of these choices
Q2
The globalization of production has allowed firms to increase their market share. lower their
cost structure. respond to individual market segments. avoid international competition. all of
these choices.
Answer: b. lower their cost structure
Q3
When a company increases its growth rate by taking goods or services developed at home and
selling them internationally, it is leveraging its existing products. taking the path of least
resistance. engaging in product positioning. realizing cost economies from global expansion.
realizing location economies.
Answer: a. leveraging its existing products
Q4
When a company expands its sales volume through international expansion, it can realize cost
savings from economies of scale through all of the following except spreading fixed costs over
its global sales volume. utilizing its production facilities more intensely. increased bargaining
power with its suppliers. learning effects associated with higher volume. improved
responsiveness.
Answer: e. improved responsiveness
Q5
When a company performs a value creation activity in the optimal location for that activity,
wherever in the world that might be, it is trying to capitalize on economies of scale. economies
of scope. the transnational strategy. location economies. its localization strategy.
Answer: d. location economies
, Q6
Which of the following is
Answer: c. The firm must be pursuing a strategy of
Q7
Global expansion
Answer: b. can enable companies to increase their profitability and grow their profits
more rapidly.
Q8
The ability to realize cost
Answer: b. commodity-type products that serve universal
Q9
In 1952, the Iranian oil industry was nationalized so that foreign ownership of oil-producing land
and equipment was made illegal and the assets were confiscated. Which of the following
disadvantages of global expansion is shown in this example? Political risk Increased tariffs
Lower costs for labor and raw materials Commodity products that command low profits
Products that need to be customized to local requirements
Answer: a. Political risk
Q10
Dell is expanding its market share in European countries because its direct-sales model is more
effective than the business model used by its European rivals. Which of the following benefits of
global expansion is Dell experiencing, relative to its competitors? Lower costs for labor and raw
materials Further exploitation of distinctive competencies Decreased political and economic risk
Better realization of location economies More incentive for local subsidiaries to develop
competencies
Answer: b. further exploitation of distinctive compentences
Q11
Which of the following factors increases pressures for cost reductions? Differences in
distribution channels Increasing national wealth Great transportation needs High switching
costs Price as the main competitive weapon in a market
Answer: e. Price as the main competitive weapon in a market
