MGMT 459 Exam II Review

A firm establishing a manufacturing plant in a foreign country due to the cheap labor costs in that country is an example of the _____ advantage that the firm enjoys.

_____ refers to price setting at a level higher than the competitive level by monopolists.

If a firm engages in final assembly in its home operations, then which of the following operations of the firm in a foreign country would be considered a downstream vertical FDI?

Firms prefer FDI to licensing because FDI_____.

An industry with heterogeneous products, in which rivals are forced to compete on price, is likely to lead to collusion.

Which of the following statements best describes an FDI?

Inside directors are more independent and can better safeguard shareholder interests.

If Apple, making smartphone, invests in iPhone dealerships in Asia but does not engage in distribution in the United States (Apple’s host country), then Apple’s Asian investment would be considered a(n) _____.

Mutual forbearance refers to retaliatory attacks on a competitor's other markets if this competitor attacks a firm's original market.

Which of the following is a primary cost of FDI to home countries?