Introduction to Business Practice Chapter 5

  1. Describe absolute advantage:
    The ability to produce something more efficiently than any other country
  2. Describe comparative advantage:
    The ability to produce some products more efficiently than others
  3. Describe National competitive advantage:
    International competitive advantage stemming from a combination of factor conditions, demand conditions, related and supporting industries, and firm strategies, structures and rivalries.
  4. Describe International competitiveness:
    Competitive marketing of domestic products against foreign products
  5. Balance of trade:
    The economic value of all the products that a country exports minus the economic value of all the products it imports
  6. Surplus:
    Situation in which a country exports more than it imports, creating a favourable balance of trade.
  7. Deficit:
    Situation in which country's imports exceed its exports, creating a negative balance of trade.
  8. Balance of payments:
    Flow of all money into or out of a country
  9. Exchange rate:
    Rate at which the currency of one nation can be exchanged for the currency of another nation
  10. International firm:
    Firm that conducts a significant portion of its business in foreign countries
  11. Multinational firm:
    Firm that designs, produces, and markets products in many nations
  12. Independent agent
    Foreign individuals or organization that agrees to represent an exporter's interests
  13. Licensing arrangement
    Arrangement in which firms choose foreign individuals or organizations to manufacture or market their products in another country
  14. Royalties
    Fees that an exported receives for allowing a company in a foreign country to manufacture or market the exporter's products
  15. Quota
    A restriction by one nation on the total number of products of a certain type that can be imported from another nation
  16. Embargo
    A government order forbidding exportation and/or importation of a particular product
  17. Tariff
    A tax levied on imported products
  18. Revenue tariff
    A tariff imposed solely to raise money for the government that imposes it
  19. Protectionist tariffs
    A tariff imposed at least in part t discourage imports of a particular product
  20. Subsidy
    A government payment to help domestic business compete with foreign firms
  21. Protectionism
    Protecting domestic business at the expense of free market competition
  22. Local-content laws
    Laws requiring that products sold in particular country be at least partly made in that country
  23. Business-practice law
    Law or regulation governing business practices in given countries
  24. Cartel
    Any association of producers whose purpose is to control supply of and prices for a given product
  25. Dumping
    Selling a product for less abroad that in the producing nation
  26. Explain the process for a company of go international:
    • The process in which a company researches if going international is possible.
    • Ex is there international demand for the firm's products?
    • can the product be modified to fit a foreign market?
    • is the foreign business climate suited to imports?
    • does the firm have or can it get necessary skills and knowledge to do business abroad?
Card Set
Introduction to Business Practice Chapter 5
Introduction to Business Practice Chapter 5