1. Which philosophy can be traced back to the ancient Greek philosopher Aristotle?

a. socialism
b. individualism
c. collectivism
d. anarchism

2. Those who are proponents of totalitarianism believe that

a. government is by the people, exercised either directly or through elected representatives.
b. citizens should have total control and be directly involved in decision making.
c. one person or political party should exercise absolute control over all spheres of human life.
d. the welfare of society is best served by letting people pursue their own economic self-
interests.

3. Which system of government generally permits some individual economic freedom but
restricts individual political freedom, frequently on the grounds that it would lead to the rise of
communism?
a. tribal totalitarianism
b. right-wing totalitarianism
c. democratic totalitarianism
d. theocratic totalitarianism

4. In a pure market economy,

a. all productive activities are owned by the state.
b. production is determined by the interaction of market forces of supply and demand.
c. collectivist goals are given priority over individual goals.
d. the prices at which goods are sold are determined by the government.

5. The abolition of ________ in a command economy distorts incentive and competition.

a. private ownership
b. public ownership
c. government-owned businesses
d. co-operatives

6. The local grocery in a small southern city is the only option for the residents, so it has a
monopoly on the grocery business there. When the population of the city grows and demand
for groceries increases, what is the grocery store most likely to do?
a. Restrict output to drive prices down.
b. Increase output to drive prices down.
c. Restrict output and let prices rise.
d. Increase output and keep prices constant.

7. In 2008, the U.S. government took an 80 percent stake in AIG to stop that financial institution
from collapsing, the theory being that if AIG did collapse, it would have very serious
consequences for the entire financial system. This example is representative of
a ________blank economy.
a. command
b. mixed
c. capitalistic
d. market

8. Which statement about the legal systems of countries is true?

a. They can affect the attractiveness of a country as an investment site or market.
b. They are not influenced by the prevailing political system of the country.
c. They are almost the same for all countries.
d. They are of little importance to international business.

9. One key component of a country’s legal system is

a. establishing a mixed economy.
b. taking a hands-off approach to business practices.
c. defining the rights and obligations of those involved in business transactions.
d. leaving the monitoring of the way business transactions are executed to the United Nations.

10. Under the ________blank system, cases are judged with reference to three characteristics:
tradition, precedent, and custom.
a. theocratic law
b. civil law
c. contract law
d. common law

11. Violation of property rights done through legal mechanisms such as levying excessive
taxation and requiring expensive licenses or permits from property holders is called
a. private action.
b. collective action.
c. public action.
d. copyright violation.

12. Which is an example of intellectual property?

a. a music score
b. a laser-tag game
c. a software business
d. a theater

13. _______ refers to the shift toward a more integrated and interdependent world economy.
a. Outsourcing
b. International marketing
c. Privatization
d. Globalization

14. In 2008 and 2009, the ________ became the forum through which major nations attempted
to launch a coordinated policy response to the global financial crisis, which started in
America.
a. United Nations
b. Group of Seven (G7)
c. Group of Twenty (G20)
d. World Trade Organization

15. Which factor has contributed to the globalization of markets?

a. a decrease in foreign direct investment
b. global convergence of consumer tastes and preferences
c. an increase in cross-border barriers to trade
d. the trend to separate a homogeneous market into separate national markets

16. Globalization has resulted in

a. less interdependence between national economies.
b. an increase in the use of outsourcing.
c. a collective material culture becoming more diverse.
d. increasing barriers to cross-border trade.

17. Which factor hinders globalization of consumer goods market?

a. national and cultural differences in tastes and preferences
b. increasing incomes in emerging markets
c. homogenization of material culture
d. increased outsourcing of goods and services

18. Globalization of markets results in markets becoming

a. less interdependent.
b. less diverse.
c. more protected.
d. less competitive.

19. A U.S. investment firm set up a customer service call center in India to take advantage of
lower labor costs. This is called
a. homogenizing markets.
b. vertical integration.
c. outsourcing.
d. horizontal integration.

20. The World Trade Organization promotes

a. the lowering of barriers to cross-border trade and investment.
b. the development of poor nations through low-interest loans.
c. state ownership of major enterprises.
d. the regulation of national economies.

21. The ________blank was established on October 24, 1945, by 51 countries committed to
preserving peace through international cooperation and collective security.
a. World Trade Organization
b. United Nations
c. G20
d. World Bank

22. Culture is
a. a fully formed, fixed concept.
b. constantly evolving.
c. stable and unchanging.
d. a certain but abstract concept.

23. Cross-cultural literacy refers to

a. an individual’s self-concept derived from perceived membership in a relevant social group.
b. the phenomenon of merging and converging cultures.
c. abstract ideas about what a group believes to be good, right, and desirable.
d. an understanding of how cultural differences can affect the way business is practiced.

24. Hassan lives in Saudi Arabia. If he is caught consuming alcohol, he will be accused of
violating his country’s ________blank and may face imprisonment.
a. norms
b. folkways
c. mores
d. values
25. ________ is best defined as shared assumptions about how things ought to be.
a. Norms
b. Values
c. Ethics
d. Culture

26. For Jake and Tyrone, U.S. army veterans, ________blank are not just abstract concepts.
These men argue that concepts such as individual freedom and democracy are so important,
they are worth fighting for.
a. folkways
b. values
c. mores
d. norms

27. ________ are typically defined on the basis of characteristics such as family background,
occupation, and income.
a. Social strata
b. Norms
c. Social structure
d. Groups

28. Which statement is true about a class system?

a. A class system is a more rigid form of social stratification, compared to a caste system.
b. A class system is a closed form of stratification.
c. Social mobility within a class system varies from society to society.
d. In a class system, social position is determined at birth and cannot be changed during an
individual’s lifetime.

29. A caste system differs from a class system because

a. a caste system is an open system of stratification, while a class system is a closed system of
stratification.
b. it is not possible for an individual to change his or her caste, while a class system allows
people to change their class through individual achievement.
c. the social mobility in caste systems varies from society to society, while in a class system
there is no social mobility.
d. a caste system is a less rigid form of social stratification, while a class system is a
comparatively more rigid form of social stratification.

30. Religion may be defined as

a. routine conventions of everyday life.
b. social rules that govern people’s actions toward each other.
c. shared beliefs and rituals that are concerned with the realm of the sacred.
d. a set of moral principles, or values, that are used to guide and shape behavior.

31. Max Weber was a German sociologist who, in 1904, made the connection
between ________ and “the spirit of capitalism.”
a. Protestant ethics
b. ethnocentrism
c. cross-cultural literacy
d. collectivism
32. According to Islam, those who hold property are regarded as
a. trustees.
b. owners.
c. tenants.
d. speculators.

33. Under the mudarabah banking system, when an Islamic bank lends money to a business
a. it charges that business interest on the loan.
b. the business needs to pay back the loan with an additional markup.
c. it has to donate the interest received on the loan to a charitable trust.
d. it takes a share in the profits that are derived from the investment.

34. The ________blank dimension of Hofstede’s study explores how a society deals with the fact
that people are unequal in physical and intellectual capabilities.
a. power distance
b. individualism versus collectivism
c. uncertainty avoidance
d. masculinity versus femininity

35. Which scenario is an example of ethnocentrism?

a. A manager in India looks down upon his subordinates because they are from a lower caste,
compared to him.
b. An upper-middle-class woman talks rudely to a salesperson, because she looks down upon
individuals belonging to the working class.
c. An American manager criticizes the cultural practices of Saudi Arabia, when he is sent there
on business, because it differs from his own cultural norms.
d. A French business owner, who plans to expand his market to China, conducts a detailed
cultural study of China to customize his marketing campaign.

36. A condition where people tend to perceive themselves in terms of their class background
and this shapes their relationships with members of other classes is known as
a. class stratification.
b. social mobility.
c. class mobility.
d. class consciousness.

37. What is one of the three main reasons for the spread of democracy?
a. New information and communication technologies have broken down the ability of the state
to control access to uncensored information.
b. Totalitarian regimes delivered economic progress to the bulk of their populations but not
enough to the power brokers.
c. Democratic regimes failed to deliver economic progress to the vast bulk of their populations.
d. Economic advances in the past quarter-century have led to the emergence of a class of
ruling elite.

38. ________ are the advantages gained by early entrants into a market.
a. Early-investor advantages
b. First-mover advantages
c. First-to-market advantages
d. Late-mover advantages
39. Countries with ________blank economies in which property rights are protected tend to
achieve greater economic growth rates than other economies where property rights are
poorly protected.
a. mixed
b. market
c. centralized
d. command

40. The likelihood that a trading partner will opportunistically break a contract or expropriate
property rights is called a(n)
a. economic risk.
b. legal risk.
c. cultural risk.
d. political risk.