Question : 61.Which of the following products has a low value-to-weight ratio? A. Electronic : 1299331

61.Which of the following products has a low value-to-weight ratio? 

A. Electronic components

B. Personal computers

C. Medical equipment

D. Computer software

E. Cement

62.A firm that does not want to bear the costs of establishing production facilities in a foreign country should avoid: 

A. exporting.

B. FDI.

C. licensing.

D. franchising.

E. outsourcing.

63.Governments impose quotas to limit _____. 

A. FDI

B. importing

C. franchising

D. outsourcing

E. licensing

64.The argument that firms prefer FDI over licensing to retain control over know-how, manufacturing, marketing, and strategy or because some firm capabilities are not amenable to licensing constitutes the _____. 

A. comparative advantage theory

B. distribution theory

C. new trade theory

D. internalization theory

E. licensing theory

65.The market imperfections approach seeks to explain: 

A. the disadvantages associated with the adoption of a completely free market view.

B. why different nations import goods from other countries even when they are more capable of producing them efficiently.

C. the preference for FDI over licensing by firms as a strategy to enter foreign markets.

D. the benefits of exercising protectionism coupled with partial adoption of free market approach.

E. the pattern of sale of products from one country to another.

66.According to internalization theory: 

A. licensing gives a firm the tight control over manufacturing, marketing, and strategy in a foreign country that may be required to maximize its profitability.

B. licensing may result in a firm’s giving away valuable technological know-how to a potential foreign competitor.

C. licensing has no major drawbacks as a strategy for exploiting foreign market opportunities.

D. a problem with licensing arises when the firm’s competitive advantage is based much on its products rather than on the management, marketing, and manufacturing capabilities that produce those products.

E. licensing is more profitable than FDI.

67.According to internalization theory, one of the drawbacks of licensing is that: 

A. it may result in a firm’s technological know-how being restricted to a limited knowledge base and stifles any future development.

B. it does not give a firm the tight control over manufacturing, marketing, and strategy in a foreign country that may be required to maximize its profitability.

C. when a firm allows another enterprise to produce its products under license, the licensee bears the costs or risks.

D. its use is restricted by the government by imposing tariffs and quotas.

E. it is less cost-effective than FDI.

68.A firm is most likely to favor foreign direct investment over exporting when: 

A. the firm wants its technological know-how to be widely disseminated.

B. the firm wishes to maintain control over its operations and business strategy.

C. the transportation costs are low.

D. there are no trade barriers.

E. the firm wants to customize its products as per the tastes and preferences of foreign consumers.

69.The strategic behavior theory: 

A. explains the constrains of exporting and licensing.

B. seeks to explain the challenges faced by a firm during the establishment of a new operation in a foreign country.

C. seeks to explain the patterns of FDI flows based on the idea that FDI flows are a reflection of strategic rivalry between firms in the global marketplace.

D. reviews the theories that have been used to explain foreign direct investment.

E. explains how greenfield investments are better than FDI.

70.The cement market in Erbia is dominated by four firms. These firms control 85 percent of selling and buying of the domestic market. Which of the following terms explains the market structure of cement industry in Erbia? 

A. Perfect competition

B. Monopoly

C. Oligopoly

D. Dual monopoly

E. Monopsony