C211 Global Economics for Managers Practice Questions - Set 3 - Part 1

Correct Answer: c) Identifying and preparing for high-risk events

Risk management focuses on identifying, assessing, and preparing to minimize the impact of high-risk, unfortunate events in global business.

Correct Answer: c) Theocratic law

Theocratic law is a legal system based on religious teachings, often found in countries where religion plays a significant role in governance.

Correct Answer: b) Piracy

Piracy refers to the unauthorized use, reproduction, or distribution of intellectual property without permission from the rights holder.

Correct Answer: a) The poorest one billion people globally

The "bottom billion" refers to the poorest one billion people in the world, who are concentrated in low-income countries, particularly in Africa and Central Asia.

Correct Answer: b) To prevent the sale of goods below cost in foreign markets

Antidumping laws are designed to prevent foreign companies from selling goods below cost in order to drive local competitors out of business.

Correct Answer: b) Regulatory, normative, and cognitive

The three pillars of institutions are the regulatory, normative, and cognitive frameworks that influence individual and firm behavior.

Correct Answer: c) Internal resources and capabilities

The resource-based view focuses on a firm's internal resources and capabilities as the main factors contributing to its competitive advantage.

Correct Answer: b) Purchasing Power Parity

Purchasing Power Parity (PPP) is a measure that adjusts for differences in the cost of living between countries by comparing the price of identical goods.

Correct Answer: c) Absolute advantage theory

Absolute advantage theory suggests that countries should specialize in the production of goods where they are more efficient than other nations.

Correct Answer: a) Subsidy

A subsidy is a government payment provided to domestic firms to support their operations and enhance their competitiveness.

Correct Answer: a) Command economy

A command economy is one in which the government controls the factors of production and makes all decisions regarding the allocation of resources.

Correct Answer: b) Equilibrium price

The equilibrium price is the price at which the quantity supplied equals the quantity demanded, resulting in a stable market.

Correct Answer: a) Gross National Income (GNI)

GNI includes GDP plus income earned by residents from foreign investments, providing a broader measure of a country's total income.

Correct Answer: a) Patent

A patent grants inventors the exclusive right to derive income from their new products or processes for a specific period of time.

Correct Answer: c) Price elasticity of demand

Price elasticity of demand measures the responsiveness of the quantity demanded to changes in the price of a good.

Correct Answer: a) Price discrimination

Price discrimination occurs when a firm sells the same product at different prices to different customers based on factors like willingness to pay.

Correct Answer: b) Hong Kong, Singapore, South Korea, and Taiwan

The "Four Tigers" refers to Hong Kong, Singapore, South Korea, and Taiwan, known for their rapid industrialization and economic growth.

Correct Answer: c) Expropriation risk

Expropriation risk refers to the possibility that a government will seize foreign-owned assets without compensation, posing a threat to foreign investors.

Correct Answer: c) Barriers to market integration exist, but are not high enough to completely insulate countries

Semiglobalization suggests that while barriers to market integration remain, they are not strong enough to prevent economic interaction between countries.

Correct Answer: b) Price elasticity of supply

Price elasticity of supply measures how much the quantity supplied of a good responds to changes in its price.