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.
What are the major items that are exported from India?
Q 3.
Explain different forms of Joint Ventures.
Q 4.
Reebok orders for footballs to local manufacturers of Ludhiana and then sells it all over the world. It is an example of what?
Q 5.
List the major countries with whom India trades.
Q 6.
State the important changes being observed in composition of India's external trade since 2007-08.
Q 7.
Which mode of international business should be chosen by a small business man and why?
Q 8.
What are the benefits of international trade to firms?
Q 9.
Discuss the merits and demerits of entering into joint ventures.
Q 10.
Discuss any three advantages of international business.
Q 11.
Discuss the scope of international business.
Q 12.
India is_largest economy in the world.
Q 13.
Discuss as to why nations trade.
Q 14.
Discuss meaning, merits and demerits of contract manufacturing.
Q 15.
When a middleman is involved in handling export procedure, then it is called by what name?
Q 16.
"International trade benefits both the parties involve."Do you agree? Justify your answer:
Q 17.
Why is it said that licensing is an easier way to expand globally?
Q 18.
Licensee or franchisee pays a fee to licensor or franchisor. What is it called?
Q 19.
Which service has got dominating share in foreign trade in services?
Q 20.
Name the country whose share is largest in India's exports and imports.
Q 21.
How is home trade different from external trade?
Q 22.
What is the basic reason behind international trade?
Q 23.
Discuss the major trends in India's foreign trade. Also list the major products that India trades with other countries.
Q 24.
List major items of India's import.
Q 25.
Write a short note on India's foreign investments.
Q 26.
What is the major reason under lying trade between nations?
Q 27.
Give one point of difference between licensing and franchising.
Q 28.
"Foreign trade is not free from difficulties."Comment.
Q 29.
Discuss meaning, merits and demerits of contract manufacturing.
Q 30.
What benefits do firms derive by entering into international business?
Q 31.
Discuss the benefits of international business.
Q 32.
India embarks on the path of globalisation. Comment
Q 33.
In what ways is exporting a better way of entering into international markets than setting up wholly owned subsidiaries abroad.
Q 34.
Out of international trade and international business which one is wider in scope?
Q 35.
Enumerate limitations of contract manufacturing.
Q 36.
"International business is more than international trade". Comment.
Q 37.
Discuss briefly the factors that govern the choice of mode of entry into international business.
Q 38.
"Wholly owned subsidiary is a more investing, more risky and less return giving venture."Do you agree? Substantiate your answer.
Q 39.
Explain different forms of contract manufacturing.
Q 40.
Define international business.
Q 41.
What is invisible trade? Discuss salient aspects of India's trade in services.
Q 42.
Differentiate between international trade and international business.
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?
