Question:
Discuss as to why nations trade.
Answer:
Nations trade because of following reasons:
- Unequal distribution of natural resources: Resources are unequally distributed in natural resources. Some countries are abundant in one commodity and scarce in other while opposite is true for some other country. It makes a case for international trade and exchanging abundant commodity with scarce commodity by nations.
- Unequal availability of factors of production: Different nations are endowed with different factors of production which includes land, labour, capital and entrepreneurship. For example, India is a labour abundant country. Therefore, it is advisable for India to produce such commodities which use labour intensive methods and exchange it for those which use capital intensive methods. USA is a capital abundant country. Therefore, nations need to trade.
- Theory of Comparative Cost Advantage: Due to these factors, some countries are in an advantageous position in producing selected goods and services which other countries cannot produce that effectively and efficiently and vice-versa. Consequently, each country finds it advantageous to produce those selected goods and services that it can produce more effectively at home and importing those goods in which other nations have a comparative cost advantage.
- Geographical Specialisation: The international business as it exists today is the result of geographical specialisation. Even within a country each state specialises in those goods for which it is geographically more suitable. Similarly, each nation specialises in those goods in which it is specialised as per availability of resources and exchanges it for other goods and services in foreign market.
- Cost minimization principle of firms: Firms get involved in international business to minimise their costs and maximise their profits.
International Business I
Q 1.
What is the share of India's exports in world exports?
Q 2.
Which mode of international business should be chosen by a small business man and why?
Q 3.
Explain different forms of Joint Ventures.
Q 4.
What are the major items that are exported from India?
Q 5.
Reebok orders for footballs to local manufacturers of Ludhiana and then sells it all over the world. It is an example of what?
Q 6.
Discuss the scope of international business.
Q 7.
Discuss as to why nations trade.
Q 8.
State the important changes being observed in composition of India's external trade since 2007-08.
Q 9.
What are the benefits of international trade to firms?
Q 10.
List the major countries with whom India trades.
Q 11.
Discuss the merits and demerits of entering into joint ventures.
Q 12.
Discuss meaning, merits and demerits of contract manufacturing.
Q 13.
India is_largest economy in the world.
Q 14.
Discuss any three advantages of international business.
Q 15.
When a middleman is involved in handling export procedure, then it is called by what name?
Q 16.
Licensee or franchisee pays a fee to licensor or franchisor. What is it called?
Q 17.
"International trade benefits both the parties involve."Do you agree? Justify your answer:
Q 18.
Which service has got dominating share in foreign trade in services?
Q 19.
Discuss the major trends in India's foreign trade. Also list the major products that India trades with other countries.
Q 20.
What is the basic reason behind international trade?
Q 21.
How is home trade different from external trade?
Q 22.
Why is it said that licensing is an easier way to expand globally?
Q 23.
List major items of India's import.
Q 24.
Write a short note on India's foreign investments.
Q 25.
"Foreign trade is not free from difficulties."Comment.
Q 26.
Give one point of difference between licensing and franchising.
Q 27.
What is the major reason under lying trade between nations?
Q 28.
Name the country whose share is largest in India's exports and imports.
Q 29.
Out of international trade and international business which one is wider in scope?
Q 30.
Discuss meaning, merits and demerits of contract manufacturing.
Q 31.
Enumerate limitations of contract manufacturing.
Q 32.
India embarks on the path of globalisation. Comment
Q 33.
Discuss the benefits of international business.
Q 34.
What benefits do firms derive by entering into international business?
Q 35.
"International business is more than international trade". Comment.
Q 36.
In what ways is exporting a better way of entering into international markets than setting up wholly owned subsidiaries abroad.
Q 37.
"Wholly owned subsidiary is a more investing, more risky and less return giving venture."Do you agree? Substantiate your answer.
Q 38.
Discuss briefly the factors that govern the choice of mode of entry into international business.
Q 39.
Explain different forms of contract manufacturing.
Q 40.
Define international business.
Q 41.
Differentiate between international trade and international business.
Q 42.
What is invisible trade? Discuss salient aspects of India's trade in services.
Q 43.
Differentiate between contract manufacturing and setting up wholly owned production subsidiary abroad.
Q 44.
Distinguish between licensing and franchising.
Q 45.
What is international business? How is it different from domestic business?
Q 46.
Licensing and franchising are suitable in different situations. Explain how?
