Section 1

Which of the following is a factor within the international trade environment that influences business?

• Tariffs and trade barriers

• Local weather conditions

• Cultural festivals

• Domestic sports events

Nations trade because:

• They want to increase their wealth.

• They have surplus resources.

• They need to access goods not available domestically.

• All of the above.

Countries trade with each other because:

• They want to exchange cultural values.

• They aim to achieve economic growth.

• They need to establish political alliances.

• They wish to explore new territories.

What is international business?

• The buying, selling, and trading of goods and services across national boundaries

• The local exchange of goods and services

• The regulation of trade within a country

• The production of goods for local markets.

Falling political barriers and new technology are making it possible for more and more companies to ______ their products overseas.

• sell

• buy

• store

• discard

Nations and businesses engage in international trade because:

• It allows access to a larger market.

• It increases the cost of goods and services.

• It limits the availability of resources.

• It reduces competition.

What is the definition of 'Outsourcing'?

• The practice of hiring external firms to handle work normally performed within a company.

• The process of selling goods and services to another country.

• The act of merging two companies into one.

• The strategy of investing in new technologies to improve efficiency.

What is 'Absolute advantage'?

• A situation where a country is the only source of an item.

• A situation where a country is the only producer of an item.

• A situation where a country is the most efficient producer of an item.

• All of the above.

What is the term for when a country specializes in products that it can supply more efficiently or at a lower cost than it can produce other items?

• Comparative advantage.

• Absolute advantage.

• Trade surplus.

• Economic equilibrium.

Most international trade is based on which of the following concepts?

• Absolute advantage

• Comparative advantage

• Trade surplus

• Trade deficit