Page 116 - Introduction to Business

90 PART 1 The Nature of Contemporary Business

Chapter Questions crude oil output.” What is OPEC? How does a cut
in OPEC’s output impact U.S. gasoline prices?
1. Should business really care what a government’s 2. Airbus, the European aircraft manufacturer, has
economic policy goals are? Why? What are the strengthened its lead over Boeing for leadership in
implications for business? the global civil aerospace industry by winning
2. Four major policy tools to manage the economy more aircraft orders. What is Airbus’s nationality,
are discussed in this chapter. Each policy tool has and what is the most daring venture it is currently
its own implications to business. Analyze in detail. undertaking? What is Boeing’s response to Airbus’s
3. Explain the three major reasons why consumers venture?
would prefer to live in countries that participate in 3. Wal-Mart, the world’s largest company in terms of
free trade. sales revenue, is on a global expansion spree. Wal-
4. Compare the theories of absolute and comparative Mart either builds brand new stores or purchases
advantage. existing stores overseas to meet its growth ambi-
5. Given the fact that free trade is the best form of tions. What is this form of international business
transacting business between countries, why do activity called? How would you rationalize Wal-
countries impose trade barriers? What are the Mart’s strategic move?
major forms of barriers to trade? Explain fully.
6. What is the difference between foreign direct
investment and foreign portfolio investment? Web Assignments
7. What is the foreign exchange market? What is an
exchange rate and how is it determined in a free 1. Visit O.I. Corporation’s website, www.oico.com,
market system? Differentiate between the floating, surf that website, and determine what size busi-
managed floating, and fixed exchange rate ness it is, what types of products it makes, and
systems. where its major markets are located. How competi-
8. Trace the history of globalization from the fifteenth tive is O.I. Corporation and what intrigues you
century. most about O.I. Corporation?
9. Explain the stages of regional integration and 2. Visit Unilever’s home page, www.unilever.com,
highlight the major pros and cons of regional and determine the nationality of this company.
integration. What is Unilever’s major business? List the various
10. Explain the major ways for firms to get involved in brands of products (by category) that it sells in the
international business. What is the trade-off firms United States.
should consider before they get involved with any 3. Visit Cemex’s website, www.cemex.com, surf that
particular form of international business activity, website, and determine the line of business of this
and why should they consider it? company, the company’s main business strategy,
11. What are multinational enterprises (MNEs)? What and how this company managed to become the
are the factors that motivate MNEs to venture most efficient and profitable in its industry.
overseas? Describe two major avenues by which 4. Visit Infosys’s homepage, www.infosys.com, and
MNEs expand their overseas operations. answer the following questions: Where are Infosys’s
corporate and U.S. headquarters located? What is
the company’s main line of business and where
Interpreting Business News (which country) does its major source of revenue
come from? What type of industry is this MNE
1. We often hear on the radio and TV and read in venturing in and how successful has this company
business newspapers that, “Retail gasoline prices been over the years? How would you measure
are rising in the U.S. as OPEC decides to curb Infosys’s success?

Copyright 2010 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.