MIB Master of International Business 2

Question 1

Which theory explains why countries trade based on their relative efficiency differences rather than absolute cost advantages?

Accepted Answer

Comparative Advantage Theory

Answer

Comparative Advantage Theory, developed by David Ricardo, states that countries should specialize in goods they produce relatively more efficiently, even if another country is absolutely better at producing everything.

Question 2

A U.S. company licenses its technology to a Brazilian firm in exchange for royalty payments. This market entry mode is called:

Accepted Answer

Licensing

Answer

Licensing allows a foreign firm to use intellectual property (patents, trademarks, technology) in exchange for royalties, with minimal capital investment by the licensor.

Question 3

Under the PESTEL framework, changes in a host country's corporate tax rates fall under which category?

Accepted Answer

Political

Answer

Tax policy is set by government legislation, placing it under the Political category of PESTEL analysis.

Question 4

Which international financial reporting standard is most widely adopted outside the United States?

Accepted Answer

IFRS

Answer

International Financial Reporting Standards (IFRS) are used in over 140 countries and is the dominant accounting standard outside the U.S., which primarily uses GAAP.

Question 5

When a multinational firm adapts its products significantly for each local market, it is pursuing a:

Accepted Answer

Multidomestic strategy

Answer

A multidomestic strategy involves customizing products and marketing to meet local preferences in each country, prioritizing local responsiveness over global efficiency.

MIB - Master of International Business Practice Test

MIB - Master of International Business Practice Test

MIB Master of International Business 2