Question 1

Which system has elements of a market economy and a command economy?

Options :

A : Fair economy

B : Market-command economy

C : Mixed economy

D : Compromise economy

Answer: C

Question 2

What are costs to home countries of foreign direct investment (FDI)? (Choose TWO.)

Options :

A : Job loss

B : Reduced standard of living

C : Cultural disintegration

D : Capital outflow

E : Loss of sovereignty

F : Loss of intellectual property

Answer: A,D

Question 3

When confronting MNEs, the extender strategy centers on what?

Options :

A : Leveraging homegrown competencies abroad

B : Cooperating through joint ventures (JVs) with MNEs and sell-offs to MNEs

C : Leveraging local assets in areas in which MNEs are weak

D : Engaging in rapid learning and then expanding overseas

Answer: A

Question 4

In a monopoly, which statements are likely true? (Choose TWO.)

Options :

A : One seller offers a unique good with no close substitutes

B : There are barriers to entry into the market

C : Firms are price takers

D : Marginal revenue equals price

E : Entry is free in the long run

Answer: A,B

Question 5

Point A is on the same indifference curve as Point B. What can be said about the points?

Options :

A : Point B represents a bundle that costs more than Point A.

B : The consumer’s preference for bundle A is the same as for bundle B.

C : The consumer prefers bundle A over bundle B.

D : Point A represents a bundle that costs more than Point B.

Answer: B

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