1. A _____ is an asset whose value is contingent upon a particular relationship persisting.

A. specialized asset
B. common asset
C. complementary asset
D. supplementary asset

2. Vertical integration may raise a firm's cost structure for all of the following reasons except:

A. the greater the number of subunits in an organization, the more problems coordinating and controlling those units.
B. the firm that vertically integrates into component part manufacturing may find that because its internal suppliers have an active customer, they lack the motivation to be more efficient.
C. vertically integrated firms have to determine appropriate prices for goods transferred to subunits within the firm.
D. it makes planning, coordination, and scheduling of adjacent processes more difficult, as compared to buying from independent suppliers, particularly with just-in-time inventory systems.

3. Just-in-time inventory systems:

A. can help firms improve product quality.
B. are fast becoming obsolete.
C. require that parts be warehoused.
D. give firms a buffer stock of inventory.

4. With _____, suppliers, shippers, and the purchasing firm can communicate with each other with no time delay.

A. a CAD system
B. a JIT system
C. a CAM system
D. an EDI system

5. When a firm emphasizes personal selling rather than mass media advertising in the promotional mix, the firm is using a:

A. standardized strategy.
B. pull strategy.
C. push strategy.
D. localized strategy.

6. Which of the following does not affect a firm's international communication?

A. Cultural barriers
B. Source effects
C. Channel exclusivity
D. Noise levels

7. A firm that depends more on mass media advertising to communicate the marketing message to potential consumers is using a:

A. pull strategy.
B. push strategy.
C. standardized strategy.
D. localized strategy.

8. A measure of the responsiveness of demand for a product to change in price is referred to as:

A. arbitrage demand.
B. predatory pricing.
C. price elasticity of demand.
D. experience curve pricing.

9. Which component of a typical expatriate compensation package compensates the expatriate for having to live in an unfamiliar country isolated from family and friends, deal with a new culture and language, and adapt to new work habits and practices?

A. Benefit
B. Cost-of-living allowance
C. Base salary
D. Foreign service premium

10. What is the long-term goal of international trade secretariats (ITSs)?

A. To reduce the competition between national unions.
B. To be able to bargain transnationally with multinational firms.
C. To reduce the ideological gap between union leaders in different countries.
D. To get national and international bodies to regulate multinationals.

11. What is the main difference in the way international businesses approach international labor relations?

A. The degree to which organized labor can limit the choices of an international business
B. The way work is organized within a plant
C. The degree to which labor relations activities are centralized or decentralized
D. The way staffing, management development, and compensation activities are organized

12. Foreign subsidiaries of multinational firms normally:

A. keep their accounting records in the currency of the country in which they are located.
B. do not prepare their financial statements.
C. prepare their financial statements in US dollars.
D. keep their accounting records in US dollars.

13. Firms pursuing _____ business strategies disperse each value creation activity to its optimal location in the world.

A. localization and transnational
B. global and localization
C. transnational and global
D. localization and international

14. Which of the following statements is true regarding assessing the performance of a foreign subsidiary and its managers?

A. It is inappropriate to compare subsidiaries against each other on the basis of return on investment (ROI).
B. Foreign subsidiaries operate in widely similar economic, political, and social conditions.
C. Managers should be evaluated in local currency terms after making allowances for items over which they have no control.
D. The evaluation of a subsidiary should be combined with the evaluation of its manager.

15. A tax haven:

A. allows an entity to reduce the taxes paid to the home government and those paid to foreign governments.
B. directs both the host-country government and the parent company's home government not to tax the income of a foreign subsidiary.
C. specifies that parent companies are not taxed on foreign source income until they actually receive a dividend.
D. is a country with an exceptionally low, or even no, income tax.