Gateway Ch. 3,6,11 QUIZ

Comparative Advantage

The ability of a nation to produce a good at a lower opportunity cost than another nation.

Absolute Advantage

The capacity of an individual or group to carry out a particular economic activity more efficiently than another individual or group.

Outsourcing

The practice of transferring manufacturing or other tasks to other companies, often to reduce costs.

Opportunity Cost

The benefit that is missed or forfeited when choosing one alternative over another.

Exporting

The act of selling products or services to foreign markets.

Importing

The act of buying products or services from foreign markets.

Tariffs

Taxes imposed on imported goods, which can lead to monopolies or trade wars.

Exchange Rate

The value of one currency for the purpose of conversion to another, affecting the price of products for foreign buyers.

Licensing

Granting rights to intellectual properties like patents or trademarks to foreign firms for a fee.

Franchising

Allowing foreign firms to operate a business under a brand’s model and guidelines in exchange for fees.

Strategic Alliances

Cooperative arrangements between firms that do not create a new entity but share resources and risks.

Joint Venture

A partnership in which two or more companies create a new, jointly owned company.

Foreign Direct Investment (FDI)

Investment made by a firm or individual in one country in business interests in another country.

Greenfield Investment

Creating new operational facilities in a foreign country from the ground up.

Acquisition

The act of acquiring ownership of an existing foreign company.

Management

The process of guiding resources effectively and efficiently to achieve organizational goals.

Four Managerial Functions

Planning, organizing, leading, and controlling.

Customer Satisfaction

The measure of how products and services meet or surpass customer expectations.

Strategic Planning

Long-term planning typically formed by top management to establish a mission.

Operational Planning

Short-term, specific planning that focuses on immediate needs and standards.

Tactical Planning

Medium-range planning focused on mid-range goals and resource allocation.

Marketing

The process of creating products and pricing strategies that satisfy customer needs.

Target Market

The specific group of consumers that a company aims to reach with its products and marketing.

Cost Leadership Strategy

Offering the lowest prices in the market while maintaining profitability through low production costs.

Differentiation Strategy

Creating a product or service that stands out due to unique features valued by consumers.

Product Life Cycle

The stages a product goes through from introduction to decline, requiring marketing mix revision.