International Business
Chapters One through Three Unit
Review
This review is a direct reflection
of the test that you will see in a
few days. Please try your best to
answer the questions as correctly
as possible. Good Luck!
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house to begin
the review
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Question #1
Name two of the five reasons
companies are driven to the
international market?
Endowment
Factors
Market
Political
Portfolio
investment
Correct
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question
Question #2
Cost, as a Globalization
Force, allows product
lines to achieve …
Cost
Savings
Economies
of Scale
Correct
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question
Question #3
Endowment factors are the
pieces that go into a
country’s ability to …
Produce
something
Import
Products
Correct
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question
Question #4
Name a type of domestic
operation within a foreign
country …
International
Business
Foreign
Business
Correct
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question
Question #5
Which of the following companies
is an example of an international
business?
Lilly insulin
in Belgium
Ford Motor
McDonalds
Correct
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question
Question #6
Economic Nationalism
represents the strategy of …
Mercantilism
Comparative
Advantage
Correct
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question
Question #7
The trend toward unification and
socialization of the global
community is which
globalization force?
Political
Market
Competitive
Correct
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question
Question #8
Non –Americans owned
__________ of stock and bonds
in the United States?
1.9 Trillion
2.8 Trillion
Correct
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question
Question #9
What country is the largest owner
of United States government
debt (i.e.: treasury notes)?
United
Kingdom
China
Japan
Correct
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question
Question #10
The book Wealth of Nations was
written to disprove the economic
trade theory of …
Mercantilism
Comparative
Advantage
Correct
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question
Question #10
Of the two parts of foreign
investment which part’s sole
purpose is obtaining a return of
funds invested?
Direct
investment
Portfolio
investment
Correct
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question
Question #11
Which is NOT a benefit of the First
Mover Theory?
Large
market
share
Increased
Exports
Reduced
costs
Discourage
competitors
Correct
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question
Question #12
What percentage do developed
nations trade with other
developed nations _________ ?
63%
84%
72%
Correct
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question
Question #13
Which is the easiest of the steps
to begin foreign trade?
Exporting
Setting up a
foreign sales
company
Establishing foreign
production facility
Correct
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question
Question #14
The invention of what one thing
has allowed small firms to
compete globally
Wireless
phone
Palm Pilots
internet
Correct
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question
Question #15
What is it called when someone
begins foreign trade and turns
the distribution over to someone
else
Retailing
Wholesaling
Correct
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question
Question #16
True/False: Larger firms begin
foreign trade by wholesaling
TRUE
FALSE
Correct
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question
Question #17
Competition, as a globalization
force, says that to protect your
home market by _________ a
competitor’s market
Entering
into
Importing
from
Correct
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question
Question #18
Heckscher-Olin Theory states that
if a country has an abundant
amount of production factors,
they should …
Export
different
resources
Manufacture
different
products
Export
those
products
Correct
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question
Question #19
Which is NOT a reason why
companies will go abroad?
Increase
sales
Increase
Technology
Protection from
competition
Correct
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question
Question #20
Setting up a foreign sales
company is the __________ set
to beginning foreign trade?
Easiest
Hardest
Moderate
Correct
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question
Question #21
When investors participate in the
management of a foreign firm
and receive profits on
investments that is called …
Direct
Investment
Portfolio
Investment
Correct
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question
Question #22
The United States is the ______
largest investor nation in the
world?
First
Second
Third
Last
Correct
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question
Question #23
The major economic theory in
Europe between the 16th and
18th century was …
Nationalism
Importing
Priority
Mercantilism
Correct
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question
Question #24
Prices of the factors depend only
on the supply of those factors is
an assumption of which theory?
Comparative
advantage
First mover
theory
Heckscher —
Olin Theory
Correct
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question
Question #25
In a trade situation where one
party must lose for another to
gain is called …
Game
Theory
Zero Sum
Gain
Win-Lose
Theory
Correct
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question
Question #26
When company’s globalize, they
also become global customers.
Which globalization force is this?
Political
Cost
Market
Correct
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question
Question #27
What book was written to dispel
government intervention and
control over trade?
Wealth of
Nations
Communist
Manifesto
Principles of Political
Economy and Taxation
Correct
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question
Question #28
Which is NOT a reason developed
nations trade with other
developed nations?
Business
Climate
Satisfactory
transportation
Strong
cultural
objections
Foreign
exchange is
available
Correct
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question
Question #29
True/False: It is larger countries
that are huge One Way trade
imposters?
TRUE
FALSE
Correct
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question
Question #30
True/False: Despite good
intentions, most developed
nations DO NOT trade with
developing nations?
TRUE
FALSE
Correct
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question
Question #31
A business whose activities are
carried out across national
borders is a …
International
Business
Foreign
Business
Correct
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question
Question #32
Privatization of state owned firms
to increase trading is which
globalization force?
Market
Competitive
Political
Correct
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question
Question #33
Land, Labor, and Capital are
pieces that go into a country’s
ability to produce something.
These are called?
Supply chain
parts
Production
Components
Endowment
Factors
Correct
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question
Question #34
Technology, as a globalization
force, DOES NOT allows
companies to do which of the
following better?
Track
shipping
Increase
sales
Coordinate
production
Oversee
manufacturing
Correct
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question
Question #35
True or false: Larger, developed
nations are huge proponents of
one way trade?
True
False
Correct
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question
Question #36
One assumption about Heckscher
- Olin is that technology is
___________ available.
Universally
Not
Selectedly
Correct
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question
Question #37
Trade between countries is due to
_______ in the endowment
factors of production
Similarities
Differences
Availability
Correct
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question
Question #38
The G8 countries are also called
____________ countries?
Industrialized
Developing
New
Industrialized
Correct
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question
Question #38
Which of the following is NOT a
developed country?
Canada
Israel
Brazil
United
States
Correct
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question
Question #39
Mercantilism believes that the only
source of true wealth is?
Expanding the
Empire
Increasing
Imports
Accumulation
of precious
metals
Correct
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question
Question #40
In mercantilism, the driving force
to increase wealth was?
Building
bigger ships
Explore the
new world
Imports from
other countries
Correct
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question
Question #41
The Theory of Comparative
Advantage was developed by?
David
Ricardo
Eli
Heckscher
Adam
Smith
Alan
Greenspan
Correct
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question
Question #42
Which is the hardest step in the
process of beginning foreign
trade?
Exporting
Foreign
production
facility
Foreign sales
company
Correct
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question
Question #43
Income that is not directly
concerned with the control of a
firm is called?
Active
Passive
Correct
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question
Question #44
Americans owned _____ in
foreign securities in 2002?
$4.65
billion
$786
million
$2.9
trillion
$1.84
trillion
Correct
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question
Question #45
With the first mover theory, first
mover companies normally hold
_____ of the market share?
20%
40%
30%
75%
Correct
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question
Question #46
Which of the following is an new
industrialized country?
Australia
China
Ghana
Mexico
Correct
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question
Question #47
The largest “investor” country in
the United States is?
Canada
Japan
China
United
Kingdom
Correct
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question
Question #48
Specialized labor is a tenant of
which economic theory?
Laffler
Curve
Absolute
Advantage
Comparative
Advantage
Correct
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question
Question #49
What are the two main items firms
want to increase when deciding
to go abroad?
Profits /
Sales
Exports &
Workforce
Imports &
Market share
Correct
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question
Question #50
Infant Industries will have a well
trained _______________?
Export
channels
Labor force
Import process
Correct
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question
Question #51
A country has an advantage in
making a product when its
absolute disadvantage is less is
called?
Absolute
Advantage
Comparative
Advantage
Correct
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question
Question #52
The political global force of
business leads to the ______ of
trade barriers and _____ of the
global community?
reductions /
unification
Increase /
separation
Increase /
socialization
Correct
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question
Question #53
Fast growing, middle income
countries are called?
Developed
Transition
New
Industrialized
Correct
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question
Question #54
True / False: New Industrialized
Countries import large amounts
of manufactured goods and
have a low concentration of
foreign investment?
TRUE
FALSE
Correct
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question
Question #55
What was a special category of
economic development created
just for China?
Transition
country
Emerging
market
economy
Correct
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question
Question #56
True/False: In developing
countries, government legislated
fringe benefits are higher than
other country types?
True
FALSE
Correct
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question
Question #57
National Defense trade
restrictions call for the _______
of important national industries?
De-regulation
Exporting
Protection
Correct
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question
Question #58
True/False: Protection of infant
industries is always long term
and normally have a negative
effect?
TRUE
FALSE
Correct
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question
Question #59
True/False: Trade sanctions main
goal is to hurt workers in the
offending nation?
TRUE
FALSE
Correct
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question
Congratulations
You have complete the
first portion of the
online review.
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information
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Information
Don’t forget that you need to
know the Arguments for trade
Restrictions (last page of
chapter three notes)
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house if you
want info
on the essay
questions
Essay Question Information
1) International Product Life Cycle
(at least 12 points)
2) Why is an international workforce
is beneficial to a global company
(i.e. globalized workforce) 
Cirque du Soleil video from class
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If you want to re-watch the Cirque
du Soleil video from class, there
will be a showing on Wednesday
after school in Room 246 at 3:30.
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valuable essay
information
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3) Table 2.2 (p 39)  tell me what it
all means and give me some
numbers (interpret the table)
4) Tables 2.11 & 2.12 (p54 & 55) 
tell me what it all means and give
me some numbers (interpret the
table)
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want to re-take
the review
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review
Good Work!
Good luck on the exam!
It will be written part
on Thursday, essay part
on Friday!