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Borough of Manhattan Community College, CUNY - BIOLOGY 210 MULTIPLE CHOICE Landing Service   Landing Service is a lawn furniture company that has been around for many years

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Borough of Manhattan Community College, CUNY - BIOLOGY 210

MULTIPLE CHOICE

Landing Service

 

Landing Service is a lawn furniture company that has been around for many years. It is known for its ability to produce furniture more efficiently than any other company in the nation. In truth, no other companies in any other nation come close. Landing Service has shipped many of its products internationally. In fact, 80 percent of its profits come from international sales. However, the Italian government has imposed a tax on imported furniture items to protect local companies. The Brazilian government, on the other hand, has imposed taxes on Landing Service products due to the government wanting a piece of the pie.

 

Landing Service initially thought that these taxes were unfair because it was being singled out. However, after Landing Service contacted the organization that had the power to mediate this situation, the furniture company realized that the taxation it was subjected to was legal and that there was nothing it could do about it.

 

1)Refer to Landing Service. Because the company is known for its ability to produce lawn furniture more efficiently than any other company in the world, the company must have a(n) ____ advantage.

a.	total
b.	relative
c.	comparative
d.	proportional
e.	absolute

 

 

 

 

 

 

     2.   Refer to Landing Service. What type of tax has the Italian government imposed on the company?

a.	Export duty
b.	Embargo
c.	Revenue tariff
d.	Protective tariff
e.	Nontariff barrier

 

 

 

 

     3.   Refer to Landing Service. What type of tax has the Brazilian government imposed on the company?

a.	Import duty
b.	Embargo
c.	Revenue tariff
d.	Protective tariff
e.	Nontariff barrier

 

 

 

 

     4.   Refer to Landing Service. The Landing Service does mostly

a.	mediating.
b.	domestic sales.
c.	importing.
d.	exporting.
e.	currency devaluation.

 

 

 

 

 

     5.   Refer to Landing Service. Landing Service must have contacted which of these organizations to mediate regarding unfair treatment by foreign governments?

a.	MDB
b.	GATT
c.	WTO
d.	EU
e.	OPEC

 

 

 

 

 

 

 

 

 

 

 

 

 

Lynn Bernerd, Inc.

 

Lynn Bernerd, Inc., manufactures and sells reclining furniture. The company currently operates in the United States but wishes to expand overseas. The company managers have been contemplating the best way to enter the foreign market. At first, the management felt it would be in the company’s best interest to let a foreign company use its product and brand in exchange for a royalty. The managers recognized, however, that before the company decided on its foreign strategy it needed to think through all the steps required to enter an international market. As such, the managers believed they needed to consult with some type of agency to help their firm compete more effectively in the global marketplace.

 

After all the research was completed, the senior managers realized that they wanted to export their product. The managers decided that the transport carrier would notify them when the merchandise was shipped. This would avoid any confusion about lost shipments and ensure better communication with the receiving parties.

 

     1.   Refer to Lynn Bernerd, Inc. Initially, the managers believed that ____ would be the best option for entering the foreign market.

a.	exporting
b.	creating a joint venture
c.	licensing
d.	establishing a strategic alliance
e.	a merger

 

 

 

 

     2.   Refer to Lynn Bernerd, Inc. Which of the following options is not one of the steps needed for entering an international market?

a.	Contact local government to see if taxes on trade can be waived.
b.	Establish an overseas distribution network.
c.	Set export prices and payment terms, methods, and techniques.
d.	Identify key foreign markets for the product.
e.	Identify exportable products.

 

 

 

 

 

 

     3.   Refer to Lynn Bernerd, Inc. Which agency should the managers at Lynn Bernerd, Inc. seek assistance from?

a.	GATT
b.	Trade Information Center
c.	World Trade Organization
d.	U.S. Export Assistance Centers
e.	U.S. and Foreign Commercial Services

 

 

 

 

 

 

     4.   Refer to Lynn Bernerd, Inc. When the transport carriers notify the exporter that the product has been shipped, they use a

a.	bill of lading.
b.	receipt.
c.	letter of credit.
d.	draft.
e.	shipping verification.

 

 

 

 

 

 

     5.   Refer to Lynn Bernerd, Inc. Which of the following alternatives could have worked as a link between the managers at Lynn Bernerd, Inc. and the buyer from a different country?

a.	International barter
b.	Counter trade
c.	Trading company
d.	Comparative trader
e.	Foreign-exchange control

 

 

 

 

     6.   How has international trade changed since the end of World War II?

a.	Trade across national borders has decreased since its peak during the early to mid-1900s.
b.	International trade has increased steadily since this period of time.
c.	The amount of international trading has remained relatively stable since this time.
d.	International trade has become completely unrestricted.
e.	International trading has become much more heavily regulated and restricted by all countries.

 

 

 

     7.   Which of the following scenarios would not be considered international business?

a.	A Chinese manufacturer sells toys to a large toy retailer in the United States.
b.	Intel sells its processors to a computer manufacturer in Korea.
c.	A large jewelry store in England purchases its diamonds from DeBeers in South Africa.
d.	A bearing manufacturer in South Carolina sells its parts to a Toyota plant in Kentucky.
e.	French companies purchase crude oil from Saudi Arabia.

 

 

 

 

 

     8.   The land of Narnack has very infertile soil but a large supply of oil. What action should Narnack take? Narnack should

a.	specialize in the production of crude oil and trade this for grain and other food products.
b.	grow food anyway because its people will need it for survival.
c.	focus on attracting tourists to its country and thus purchase the needed supplies of food.
d.	specialize in the production of food products such as cereals and bread.
e.	import oil to satisfy the country’s need for gasoline.

 

 

 

 

     9.   Although it lacks sources of timber and oil, Chablis has a plentiful supply of grapes for its many wineries. Which statement about Chablis is true?

a.	It has a comparative advantage in wine production.
b.	It has a comparative advantage in timber and oil production.
c.	It has an absolute advantage in the production of wine.
d.	It has an absolute advantage in timber and oil production.
e.	It has no comparative or absolute advantages.

 

 

 

 

   10.   If Japan were regarded as the best electronics manufacturer in the world, what would be true?

a.	Japan would have a comparative advantage in electronics manufacturing.
b.	Japan would have a positive balance of trade.
c.	The United States would have a comparative advantage in electronics.
d.	Japan would have an absolute advantage in electronics production.
e.	Japan would have a trade deficit with the United States.

 

 

 

 

   11.   ____ is the ability to produce a specific product more efficiently than any other product.

a.	Absolute advantage
b.	Specialization
c.	Relative advantage
d.	Dominant advantage
e.	Comparative advantage

 

 

 

   12.   A new country is formed in central Africa. It has no absolute advantage in crude oil, diamonds, or wool. However, it does manufacture high-quality bows and arrows for specialized safari adventures. Which of the following statement is true?

a.	The new country should try to produce its own crude oil, diamonds, and wool.
b.	The new country has a comparative advantage in the production of bows and arrows.
c.	The new country has an unqualified advantage in the production of bows and arrows.
d.	The new country has a determined advantage in the production of arrows.
e.	The new country is engaged in dumping bows and arrows.

 

 

 

 

   13.   Because Saudi Arabia and Australia have ____, Saudi Arabia can specialize in the production of crude oil and petroleum products, and Australia can specialize in the production of wool.

a.	a company advantage
b.	an absolute advantage
c.	a comparative advantage
d.	an effective manufacturing system
e.	very low labor costs

 

 

 

 

   14.   By definition, every country has a(n) ____ advantage in some product.

a.	relative
b.	absolute
c.	comparative
d.	superior
e.	inferior

 

 

 

 

   15.   Because it controls the world’s diamond deposits, the DeBeers Consolidated Mines, Ltd., has a(n)

a.	absolute advantage.
b.	comparative advantage.
c.	advantage based on efficient production.
d.	trade deficit.
e.	lot of diamonds.

 

 

 

 

   16.   Purchasing products or materials in other nations and bringing them into one’s own country is

a.	trading.
b.	balancing.
c.	exporting.
d.	importing.
e.	dumping.