Trade Basics
What is international trade?
The exchange of goods and services between countries.
What is comparative advantage?
The ability of a country to produce goods at a lower opportunity cost than others.
Define "globalization."
The integration of markets, economies, and cultures across borders.
What is a tariff?
A tax imposed on imported goods.
Which country’s export-led growth has been driven by industries like textiles and electronics?
Vietnam.
Name two benefits countries gain from international trade.
Access to a broader market, economic growth, specialization, etc.
Give an example of a country with a comparative advantage in technology.
Japan, the United States, etc.
Name one positive and one negative effect of globalization.
Positive: Economic growth; Negative: Loss of cultural identity.
How do quotas affect domestic businesses?
They limit imports, reducing competition for local businesses.
What was the main goal behind South Korea’s investment in education and technology?
To enhance its competitive advantage and drive economic growth.
True or False: Free trade means there are no restrictions on the movement of goods and services between countries.
True.
Why would a country with limited resources focus on developing a specific industry?
To specialize in areas where it has a comparative advantage.
True or False: All cultures value individualism over collectivism.
False.
Why might a country give subsidies to certain industries?
To support local industries, making them more competitive.
Why did Coca-Cola use localized marketing strategies in its global expansion?
To connect with local consumers by respecting cultural differences.
What does a "trade deficit" mean for a country?
It imports more than it exports.
If Country A can produce cotton more efficiently but imports cars, what concept does this demonstrate?
Comparative advantage.
What is “cultural convergence,” and how does it impact global businesses?
Cultures becoming more similar; it allows businesses to use similar strategies globally.
True or False: Tariffs can lead to trade wars.
True.
Explain how Japan’s focus on lean production contributed to its competitive advantage.
It increased efficiency and quality in industries like automotive.
Describe a situation where a country would become an exporter in the international market.
When the world price is higher than the domestic price for a good, giving a country a comparative advantage.
How does a country's focus on comparative advantage affect global efficiency?
It leads to better resource allocation globally, with countries producing what they do best.
In high power-distance cultures, who generally makes business decisions?
Decisions are typically made by leaders or those in authority.
What’s the primary goal of a country using trade barriers as a “bargaining chip”?
To negotiate favorable trade terms or influence foreign policy.
In which country did Nike face backlash for using sweatshop labor, leading to significant CSR initiatives?
Various developing countries, prominently covered in the U.S.