Unit 9: Global Competitiveness - Practice Quiz

1 What is exporting?

2 What is the main role of export management?

3 Which document commonly provides details of goods, prices, and payment terms in an export transaction?

4 What is a letter of credit mainly used for in international trade?

5 Which export method involves selling to foreign customers without using a domestic intermediary?

6 What is an export intermediary?

7 Why is export market research important?

8 How can technology improve a firm's global competitiveness?

9 What does e-commerce allow businesses to do?

10 Which is an example of technological innovation?

11 What is automation?

12 How does the internet support global competition?

13 What does research and development primarily help a company achieve?

14 What is a common result of rapid technological change in global markets?

15 What does economic growth generally mean?

16 Which indicator is commonly used to measure a country's economic output?

17 What is sustainable development?

18 Which of the following is a renewable energy source?

19 What is a negative environmental effect of rapid industrial growth?

20 What is the purpose of environmental regulations?

21 A small manufacturer wants to enter several foreign markets but has limited knowledge of overseas customers and regulations. Which entry approach is most appropriate initially?

22 An exporter prices a product at $500 and offers a 10% trade discount. If freight and insurance add $35 per unit, what is the delivered cost per unit?

23 An exporter is concerned that an unfamiliar foreign buyer may not pay after receiving the goods. Which payment arrangement best reduces this risk while still involving bank verification of documents?

24 A firm earns revenue in euros but reports its results in dollars. The euro is expected to depreciate before the customer pays. Which action would most directly manage the transaction risk?

25 A food exporter discovers that a target country requires labels in the local language and nutritional values in a different format. What should the export manager do?

26 A company wants greater control over foreign pricing and customer relationships than an export agent provides, but it does not want to manufacture abroad. Which arrangement best fits this objective?

27 Two export markets generate similar sales, but Market X has frequent customs delays and a high rate of unpaid invoices. Which performance measure would best reveal the difference in their true attractiveness?

28 A manufacturer installs flexible automation that can produce several product variants on the same line. How can this technology strengthen global competitiveness?

29 A digital platform becomes more useful to each participant as additional buyers and sellers join it. Which competitive effect is the platform primarily using?

30 A company transfers advanced production technology to a foreign joint venture. It wants local market access but fears creating a future competitor. Which safeguard is most appropriate?

31 A retailer uses real-time international sales data to adjust inventory across countries. What is the most likely competitive benefit?

32 A patented technology gives a firm a temporary global advantage, but competitors are investing heavily in alternatives. Which strategy is most likely to sustain the advantage?

33 A cloud-services company can enter a new country quickly, but local law requires citizens' data to remain within national borders. What is the best operational response?

34 A firm evaluates a new manufacturing system requiring an investment of $2 million. The system is expected to reduce annual costs by $500,000. Ignoring discounting, what is its payback period?

35 A country's output grows rapidly, but air pollution and resource depletion also rise. Why might GDP alone overstate the improvement in welfare?

36 A government introduces a carbon tax that applies equally to domestic production and imports according to their emissions. What behavior is the policy mainly designed to encourage?

37 A fast-growing economy wants to reduce emissions without limiting total electricity access. Which policy combination best supports both objectives?

38 A factory can reduce one tonne of emissions for $30, while another factory would spend $70 for the same reduction. Under a tradable permit system, which outcome is economically efficient?

39 A multinational moves a pollution-intensive activity to a country with weak enforcement while keeping cleaner operations in stricter markets. Which concern does this illustrate?

40 An economy increases material recycling, product repair, and component reuse across industries. How can this circular-economy approach support long-term growth?

41 A firm exports a specialized machine with a high unit value, uncertain after-sales service requirements, and significant political risk in the destination country. Which combination of actions best reduces total export exposure while preserving market access?

42 An exporter finds that its home currency has appreciated by 12% against the buyer's currency, while the buyer's price elasticity of demand is high. Which response is most likely to protect export volume without relying solely on a price reduction?

43 A company evaluates an export order with the following expected outcomes: a $200,000 profit with probability $0.6$, a $100,000 loss with probability , and a $300,000 loss with probability $0.1$. What is the expected monetary value of the order?

44 An exporter must choose between a distributor that offers immediate market access but little control over branding and a direct-sales model requiring substantial investment. Demand is uncertain, product knowledge is important, and switching costs are high. Which entry sequence is most defensible?

45 A government introduces a local-content rule that makes the exporter's finished product subject to a 20% tariff, while importing qualifying components would incur a 5% tariff. Which strategic adjustment most directly addresses the new trade barrier?

46 A firm sells in a market where the distributor requests exclusivity, but the distributor's sales forecasts have repeatedly been overstated. Which contract design best aligns incentives?

47 A manufacturer uses transfer prices that make its foreign subsidiary appear highly profitable, even though the subsidiary performs only routine distribution. Which concern is most directly raised by this practice?

48 A technology firm has a platform with strong network effects, but its proprietary interface prevents complementary suppliers from participating. A rival adopts open standards and begins attracting developers. Which response best protects long-term competitiveness?

49 A firm possesses a valuable algorithm, but its advantage depends on proprietary data that regulators may restrict from cross-border transfer. Which capability is most important for sustaining global competition?

50 Two firms compete in an emerging technology. Firm A has superior current performance, while Firm B has a modular architecture that is easier for customers to integrate. If adoption depends heavily on complementary innovations, which firm has the stronger strategic position?

51 A multinational can automate a process at low marginal cost, but the technology creates a severe shortage of skilled technicians in host countries. Which response best combines efficiency with sustainable international operations?

52 A company must choose between a mature technology with predictable returns and a disruptive technology with uncertain demand. Its competitors have greater financial resources, but the company has superior customer relationships. Which approach best exploits its distinctive advantage?

53 A firm uses an artificial-intelligence system trained primarily on data from high-income countries. It performs well in its original market but poorly in lower-income markets. What is the most likely root cause of the competitive failure?

54 A firm patents a technology globally but lacks manufacturing scale, distribution access, and complementary software. A competitor has weaker intellectual property but controls a broad ecosystem. Which conclusion is most accurate?

55 A country records rapid GDP growth because of carbon-intensive production for foreign consumers. Its territorial emissions rise, but consumption-based emissions remain largely abroad. Which assessment is most accurate?

56 An economy becomes more energy-efficient per unit of GDP, but total emissions continue rising because output expands faster than efficiency improves. What phenomenon does this illustrate?

57 A carbon tax causes emissions-intensive production to move to countries with weaker environmental standards. Global emissions do not decline significantly. Which policy concern does this outcome demonstrate?

58 A multinational compares two projects. Project X produces larger short-term profits but permanently damages a local ecosystem. Project Y produces slightly lower profits and preserves ecosystem services that support future production. Which investment criterion is most appropriate?

59 A developing country argues that strict climate rules would limit poverty reduction, while high-income countries demand immediate uniform reductions. Which principle most directly addresses the distributional conflict?

60 A company reports a net-zero target based heavily on purchasing offsets while its operational emissions remain unchanged. Which criticism is strongest?