When is it useful to know the cross-price elasticity of demand?

When there are MORE THAN 2 goods that are close substitutes

When the income effect is positive

Goods A and B are NOT substitutes

When 2 goods are close substitutes

the cross-price elasticity of demand will be positive and large

the cross-price elasticity will be positive and small

the cross-price elasticity of demand will be negative and large

the cross-price elasticity of demand will be negative and small

If the % change in the quantity demanded of Netflix is down by 10% and the percentage change in the price of Hulu is down 20%, are the two services CLOSE SUBSTITUTES?

THAT INFORMATION CANNOT BE DETERMINED FROM THE INFORMATION GIVEN

Cross-Price Elasticity of Demand

Cross price elasticity

She went by the name of Belisa Crepusculario, not because she had been baptized with that name or given it by her mother, but because she herself had searched until she found the poetry of "beauty" and "twilight" and cloaked herself in it. She made her living selling words. She journeyed through the country from the high cold mountains to the burning coasts, stopping at fairs and in markets where she set up four poles covered by a canvas awning under which she took refuge from the sun and rain to minister to her customers. She did not have to peddle her merchandise because from having wandered far and near, everyone knew who she was. Some people waited for her from one year to the next, and when she appeared in the village with her bundle beneath her arm, they would form a line in front of her stall. Her prices were fair. For five centavos she delivered verses from memory, for seven she improved the quality of dreams, for nine she wrote love letters, for twelve she invented insults for irreconcilable enemies. She also sold stories, not fantasies but long, true stories she recited at one telling, never skipping a word. This is how she carried news from one town to another. People paid her to add a line or two: our son was born, so-and-so died, our children got married, the crops burned in the field. Wherever she went a small crowd gathered around to listen as she began to speak, and that was how they learned about each others' doings, about distant relatives, about what was going on in the civil war. To anyone who paid her fifty centavos in trade, she gave the gift of a secret word to drive away melancholy. It was not the same word for everyone, naturally, because that would have been collective dece it. Each person received his or her own word, with the assurance that no one else would use it that way in this universe or the Beyond. Belisa Crepusculario had been born into a family so poor they did not even have names to give their children. She came into the world and grew up in an inhospitable land where some years the rains became avalanches of water that bore everything away before them and others when not a drop fell from the sky and the sun swelled to fill the horizon and the world became a desert. Until she was twelve, Belisa had no occupation or virtue other than having withstood hunger and the exhaustion of centuries. During one interminable drought, it fell to her to bury four younger brothers and sisters, when she realized that her turn was next, she decided to set out across the 2 plains in the direction of the sea, in hopes that she might trick death along the way. The land was eroded, split with deep cracks, strewn with rocks, fossils of trees and thorny bushes, and skeletons of animals bleached by the sun. From time to time she ran into families who, like her, were heading south, following the mirage of water. Some had begun the march carrying their belongings on their back or in small carts, but they could barely move their own bones, and after a while they had to abandon their possessions. They dragged themselves along painfully, their skin turned to lizard hide and their eyes burned by the reverberating glare. Belisa greeted them with a wave as she passed, but she did not stop, because she had no strength to waste in acts of compassion. Many people fell by the wayside, but she was so stubborn that she survived to cross through that hell and at long last reach the first trickles of water, fine, almost invisible threads that fed spindly vegetation and farther down widened into small streams and marshes. Belisa Crepusculario saved her life and in the process accidentally discovered writing. In a village near the coast, the wind blew a page of newspaper at her feet. She picked up the brittle yellow paper and stood a long while looking at it, unable to determine its purpose, until curiosity overcame her shyness. She walked over to a man who was washing his horse in the muddy pool where she had quenched her thirst. "What is this?" she asked. "The sports page of the newspaper," the man replied, concealing his surprise at her ignorance. The answer astounded the girl, but she did not want to seem rude, so she merely inquired about the significance of the fly tracks scattered across the page. "Those are words, child. Here it says that Fulgencio Barba knocked out El Negro Tiznao in the third round." That was the day Belisa Crepusculario found out that words make their way in the world without a master, and that anyone with a little cleverness can appropriate them and do business with them. She made a quick assessment of her situation and concluded that aside from becoming a prostitute or working as a servant in the kitchens of the rich there were few occupations she was qualified for. It seemed to her that selling words would be an honorable alternative. From that moment on, she worked at that profession, and was never tempted by any other. At the beginning, she offered her merchandise unaware that words could be written outside of newspapers. When she learned otherwise, she calculated the infinite possibilities of her trade and with her savings paid a priest twenty pesos to teach her to read and write, with her three 3 remaining coins she bought a dictionary. She poured over it from A to Z and then threw it into the sea, because it was not her intention to defraud her customers with packaged words. One August morning several years later, Belisa Crepusculario was sitting in her tent in the middle of a plaza, surrounded by the uproar of market day, selling legal arguments to an old man who had been trying for sixteen years to get his pension. Suddenly she heard yelling and thudding hoofbeats. She looked up from her writing and saw, first, a cloud of dust, and then a band of horsemen come galloping into the plaza. They were the Colonel's men, sent under orders of El Mulato, a giant known throughout the land for the speed of his knife and his loyalty to his chief. Both the Colonel and El Mulato had spent their lives fighting in the civil war, and their names were ineradicably linked to devastation and calamity. The rebels swept into town like a stampeding herd, wrapped in noise, bathed in sweat, and leaving a hurricane of fear in their trail. Chickens took wing, dogs ran for their lives, women and children scurried out of sight, until the only living soul left in the market was Belisa Crepusculario. She had never seen El Mulato and was surprised to see him walking toward her. "I'm looking for you," he shouted, pointing his coiled whip at her, even before the words were out, two men rushed her -- knocking over her canopy and shattering her inkwell -- bound her hand and foot, and threw her like a sea bag across the rump of El Mulato's mount. Then they thundered off toward the hills. Hours later, just as Belisa Crepusculario was near death, her heart ground to sand by the pounding of the horse, they stopped, and four strong hands set her down. She tried to stand on her feet and hold her head high, but her strength failed her and she slumped to the ground, sinking into a confused dream. She awakened several hours later to the murmur of night in the camp, but before she had time to sort out the sounds, she opened her eyes and found herself staring into the impatient glare of El Mulato, kneeling beside her. "Well, woman, at last you've come to," he said. To speed her to her senses, he tipped his canteen and offered her a sip of liquor laced with gunpowder. She demanded to know the reason for such rough treatment, and El Mulato explained that the Colonel needed her services. He allowed her to splash water on her face, and then led her to the far end of the camp where the most feared man in all the land was lazing in a hammock strung between two trees. She could not see his face, because he lay in the deceptive shadow of the leaves and the indelible shadow of all his years as a bandit, but she imagined from the way his 4 gigantic aide addressed him with such humility that he must have a very menacing expression. She was surprised by the Colonel's voice, as soft and well-modulated as a professor's. "Are you the woman who sells words?" he asked. "At your service," she stammered, peering into the dark and trying to see him better. The Colonel stood up, and turned straight toward her. She saw dark skin and the eyes of a ferocious puma, and she knew immediately that she was standing before the loneliest man in the world. "I want to be President," he announced. The Colonel was weary of riding across that godforsaken land, waging useless wars and suffering defeats that no subterfuge could transform into victories. For years he had been sleeping in the open air, bitten by mosquitoes, eating iguanas and snake soup, but those minor inconveniences were not why he wanted to change his destiny. What truly troubled him was the terror he saw in people's eyes. He longed to ride into a town beneath a triumphal arch with bright flags and flowers everywhere, he wanted to be cheered, and be given newly laid eggs and freshly baked bread. Men fled at the sight of him, children trembled, and women miscarried from fright, he had had enough, and so he had decided to become President. El Mulato had suggested that they ride to the capital, gallop up to the Palace, and take over the government, the way they had taken so many other things without anyone's permission. The Colonel, however, did not want to be just another tyrant, there had been enough of those before him and, besides, if he did that, he would never win people's hearts. It was his aspiration to win the popular vote in the December elections. "To do that, I have to talk like a candidate. Can you sell me the words for a speech?" the Colonel asked Belisa Crepusculario. She had accepted many assignments, but none like this. She did not dare refuse, fearing that El Mulato would shoot her between the eyes, or worse still, that the Colonel would burst into tears. There was more to it than that, however, she felt the urge to help him because she felt a throbbing warmth beneath her skin, a powerful desire to touch that man, to fondle him, to clasp him in her arms. All night and a good part of the following day, Belisa Crepusculario searched her repertory for words adequate for a presidential speech, closely watched by El Mulato, who could not take his eyes from her firm wanderer's legs and virginal breasts. She discarded harsh, cold words, words 5 that were too flowery, words worn from abuse, words that offered improbable promises, untruthful and confusing words, until all she had left were words sure to touch the minds of men and women's intuition. Calling upon the knowledge she had purchased from the priest for twenty pesos, she wrote the speech on a sheet of paper and then signaled El Mulato to untie the rope that bound her ankles to a tree. He led her once more to the Colonel, and again she felt the throbbing anxiety that had seized her when she first saw him. She handed him the paper and waited while he looked at it, holding it gingerly between thumbs and fingertips. "What the shit does this say," he asked finally. "Don't you know how to read?" "War's what I know," he replied. She read the speech aloud. She read it three times, so her client could engrave it on his memory. When she finished, she saw the emotion in the faces of the soldiers who had gathered round to listen, and saw that the Colonel's eyes glittered with enthusiasm, convinced that with those words the presidential chair would be his. "If after they've heard it three times, the boys are still standing there with their mouths hanging open, it must mean the thing's damn good, Colonel" was El Mulato's approval. "All right, woman. How much do I owe you?" the leader asked. "One peso, Colonel." "That's not much," he said, opening the pouch he wore at his belt, heavy with proceeds from the last foray. "The peso entitles you to a bonus. I'm going to give you two secret words," said Belisa Crepusculario. "What for?" She explained that for every fifty centavos a client paid, she gave him the gift of a word for his exclusive use. The Colonel shrugged. He had no interest at all in her offer, but he did not want to be impolite to someone who had served him so well. She walked slowly to the leather stool where he was sitting, and bent down to give him her gift. The man smelled the scent of a mountain cat issuing from the woman, a fiery heat radiating from her hips, he heard the terrible whisper of her hair, and a breath of sweetmint murmured into his ear the two secret words that were his alone. "They are yours, Colonel," she said as she stepped back. "You may use them as much as you 6 please." El Mulato accompanied Belisa to the roadside, his eyes as entreating as a stray dog's, but when he reached out to touch her, he was stopped by an avalanche of words he had never heard before; believing them to be an irrevocable curse, the flame of his desire was extinguished. During the months of September, October, and November the Colonel delivered his speech so many times that had it not been crafted from glowing and durable words it would have turned to ash as he spoke. He travelled up and down and across the country, riding into cities with a triumphal air, stopping in even the most forgotten villages where only the dump heap betrayed a human presence, to convince his fellow citizens to vote for him. While he spoke from a platform erected in the middle of the plaza, El Mulato and his men handed out sweets and painted his name on all the walls in gold frost. No one paid the least attention to those advertising ploys; they were dazzled by the clarity of the Colonel's proposals and the poetic lucidity of his arguments, infected by his powerful wish to right the wrongs of history, happy for the first time in their lives. When the Candidate had finished his speech, his soldiers would fire their pistols into the air and set off firecrackers, and when finally they rode off, they left behind a wake of hope that lingered for days on the air, like the splendid memory of a comet's tail. Soon the Colonel was the favorite. No one had ever witnessed such a phenomenon: a man who surfaced from the civil war, covered with scars and speaking like a professor, a man whose fame spread to every corner of the land and captured the nation's heart. The press focused their attention on him. Newspapermen came from far away to interview him and repeat his phrases, and the number of his followers and enemies continued to grow. "We're doing great, Colonel," said El Mulato, after twelve successful weeks of campaigning. But the Candidate did not hear. He was repeating his secret words, as he did more and more obsessively. He said them when he was mellow with nostalgia; he murmured them in his sleep; he carried them with him on horseback; he thought them before delivering his famous speech; and he caught himself savoring them in his leisure time. And every time he thought of those two words, he thought of Belisa Crepusculario, and his senses were inflamed with the memory of her feral scent, her fiery heat, the whisper of her hair, and her sweetmint breath in his ear, until he began to go around like a sleepwalker, and his men realized that he might die before he ever sat in the presidential chair. "What's got hold of you, Colonel," El Mulato asked so often that finally one day his chief broke 7 down and told him the source of his befuddlement: those two words that were buried like two daggers in his gut. "Tell me what they are and maybe they'll lose their magic," his faithful aide suggested. "I can't tell them, they're for me alone," the Colonel replied. Saddened by watching his chief decline like a man with a death sentence on his head, El Mulato slung his rifle over his shoulder and set out to find Belisa Crepusculario. He followed her trail through all that vast country, until he found her in a village in the far south, sitting under her tent reciting her rosary of news. He planted himself, spraddle-legged, before her, weapon in hand. "You! You're coming with me," he ordered. She had been waiting. She picked up her inkwell, folded the canvas of her small stall, arranged her shawl around her shoulders, and without a word took her place behind El Mulato's saddle. They did not exchange so much as a word in all the trip; El Mulato's desire for her had turned into rage, and only his fear of her tongue prevented his cutting her to shreds with his whip. Nor was he inclined to tell her that the Colonel was in a fog, and that a spell whispered into his ear had done what years of battle had not been able to do. Three days later they arrived at the encampment, and immediately, in view of all the troops, El Mulato led his prisoner before the Candidate. "I brought this witch here so you can give her back her words, Colonel," El Mulato said, pointing the barrel of his rifle at the woman's head. "And then she can give you back your manhood." The Colonel and Belisa Crepusculario stared at each other, measuring one another from a distance. The men knew then that their leader would never undo the witchcraft of those accursed words, because the whole world could see the voracious-puma eyes soften as the woman walked to him and took his hand in hers. Copyright © 1989 by Isabel Allende From The Stories of Eva Luna, Translated by Margaret Sayers Peden

Chapter 8: The Worlds of North and South Geography Geography refers to the seasons, climate, soil, and physical features of a region (mountains, rivers, etc.) The differences in geography b/t the N and S is one of the major reasons slavery b/c entrenched in the S while it died out in the N. Geography of the North The N has diverse geography and experiences four distinct seasons including long, harsh winters. The Great Plains region has some of the best farmland in the country. New England has rocky, hilly wilderness, not well suited for farming. It has hundreds of bays and harbors along its coastline. States farther S had rich soil and coastal access through rivers. The N also experienced mass deforestation b/c of the need for lumber and to make room for farms. Geography of the South Climate: the S had mild winters, and a long, hot, humid growing season. It has fertile lowlands, marshes and swamps. It's ideal for growing tobacco, sugar, rice, indigo, and cotton (cash crops). B/c of the geography of the S, their whole way of life was based on agriculture and geography is one of the major reasons why slavery took off in the S. Economies Economy basically refers to the way people make and spend money. The Northern economy was far more diversified than the Southern. Economy of the North The North experienced the Industrial Revolution—the shift from handmade goods to machine-made goods. This resulted in new jobs, increased production, and improved efficiency in agriculture. IOW, you can make things faster, easier, and cheaper. More ppl get more stuff. Factories were almost always located next to rivers. The Reaper The Indust. Rev. changed northern agriculture with Cyrus McCormick’s reaper. It could cut 28xs more grain than a single man. The Sewing Machine Elias Howe's sewing machine; At 250 stitches a minute, Howe's lockstitch mechanism out-stitched the output of five hand seamstresses with a reputation for speed, completing in one hour what took the sewers 14.5 hours. The Textile Mill Francis Cabot Lowell's textile mill: essentially the first factory in the US, Lowell set the model for all future factories. Interchangeable Parts Eli Whitney's interchangeable parts; considered the "dawning of a new age" of machinery. This concept was applied to pretty much all manufacturing. Economy of the South The South's economy was based on AGRICULTURE. Most southerners were agrarians. Most had small farms, some owned plantations. Slavery beginning to decline in late 1700s; prices went down (tobacco, indigo) and cotton was difficult. King Cotton Cotton was South’s most important crop. Earned more money than all other exports combined. The S would go on to supply 75% of the world's cotton demand. Cotton Gin Eli Whitney invented the cotton gin in 1794 and forever changed the US. The gin made cotton incredibly profitable. We start to see the effects of the cotton gin around 1820. Slavery and Cotton Southerners put all their money into slaves and land, and almost none into building factories. With the spread of cotton, demand for slaves increased. 1790 to 1850, number of slaves rose 600%. Transportation Again, the N was far more inventive in their approach to transportation than the S. Transportation in the North National Road National Road stretched from the East (the Potomac), over the Appalachians, to the West (Illinois), over 620 miles. Steamboat In 1807, Robert Fulton invented the steamboat. It traveled 150 miles UP the Hudson River at a speed of 5 mph. Erie Canal Built b/t 1817 and 1825, the canal spanned 363 miles and connected Lake Erie to the Hudson River. This connected farms in the W to cities in the E and the Atlantic Ocean. Clipper Ship Clippers were narrow w massive sails that were built for speed. They cut the time it took to cross the Atlantic in half. Locomotive The fastest and cheapest way to move goods was by steam-powered trains. The first RR was the B&O which was built in 1827. Transportation in the South Most people and goods in the South traveled by rivers in steamboats. The South had trains, but less than half the amount of railroad track than the North had. Society (The People) The people who made up the N and S could not have been more different. The S was primarily agrarian while the N was b/c urbanized. The S was holding on to the past, while the N was embracing change. Society in the South Society was organized into 3 distinct classes of people: rich plantation owners at the top; then white farmers and workers; slaves on the bottom. This rigid social class system was the result of a slave-based agricultural system. Power Structure Only 1 in 4 whites owned a slave. Plantation owners, who owned more than 20 slaves, dominated politics and the economy. Society in the North 7 of 10 Northerners still lived on farms by the 1840s (6 of 10 by 1860), but urbanization was growing fast in the N. The N relied on wage labor as opposed to slave labor, so most blacks in the N were free. N blacks were not treated equally and the N was about as racist as the S. Immigration Compared to the S, the N population was exploding, in large part bc of immigration. Between 1845 and 1860, 4 million immigrants came to the North. Most were German and Irish. Irish--a potato famine; German--a failed revolution. Ethnic neighborhoods developed as a result.

Management and Globalization Global Management Why companies go global How companies for global Global Business environments Global Business Types of global business Pros and cons of global businesses Ethnic Challenges for global business Culture and Global Diversity Cultural intelligence Silent language of culture Tight and loose cultures Values and national cultures Global Management Learning Are management theories universal? Intercultural competencies Global learning goals Key concepts of the challenges of globalisation: Global economy Resources, markets and competition are worldwide in scope Internationalisation The process of increasing involvement in international operations Globalization/Deglobalization Glob- the growing interdependence among elements in the global economy The worldwide interdependence of resource flows, product markets and business competition World 3.0 Different views: World flat vs. round Distance is a metaphor that represents the degree of dissimilarities between countries Balancing cooperation in the global Global Management Global management - managing things in different countries Managing business and organizations with interests in more than one country What do we expect from global Managers Knowing how to adapt Knowing the language Global Manager Is culturally aware and informed on international affairs International Business Conducting for-profit transactions of goods and services across national boundaries International Motive Why do firms internatioalize their activities Cheaper labour Labour tax Natural resources Enrolments to do business Clientele Exclusive materials Personal benefits: Taxes Reasons why businesses go global Customers Suppluers Capital During (1993) - 4 motive 1. Market seeking 2. Efficiency Seeking 3. Resource seeking 4. Strategic Asset Seeking Cuervo Cazurra, Narula and un (2015) - 4 motive s Internationalization Motives A company may also explore the opportunities in different markets in order to take advantage and in some cases extend the product life cycle What is a Market Entry Strategy Involves the sale of goods or services to foreign markets but do not require expensive investments Franchising Exporting and importing Involve the sale of goods or services to foreign markets but do Types of market entry strategies Global sourcing Exporting Importing Licensing agreement Franchising Types of Foreign Direct Investment (FDI) strategies: Joint venture Strategic alliance Owned Subsidiary (sometimes called WOS) How to go abroad What conditions will affect the decisions of firms on how to internationalize their activities? During (1978)- Eclectic paradigm OLI model OLI- Ownership, Location and Internalization Advantages Ownership advantages Resources owned by the organization that can be transferred across locations include trademarks, production techniques and processes, managerial skills and other resources not available to the competitors Location Advantages Represent the implications of choosing to produce or to perform activities in a specific location (country or region) Internalization Advantages: The ability to internalize or to incorporate activities that add value to its business Evolution of Concepts- New Elements Although economic factors are certainly important to explain the formation, growth and expansion of firms within and across national borders, they are not sufficient to explain the additional complexity when a firm decides to expand its activities across national borders Economic factors Investigate the economic elements that affect the internationalization of firms Behavioural Elements Explaining the additional challenges (and perhaps opportunities) a firm faces in foreign host countries when compared to indigenous (local) firms Behavioural theories Johanson and Wiedersheim-Paul (1975) and Johanson and Vahlne (1977) Included the psychic Distance concept (beckerman,1956) to explain the internationalization behaviour of firms The Uppsala internationalization model Psychic distance is: the sum of factors preventing the flow of infomatio from and to the market Psychic Distance is a broad concept that includes several elements such as: language, culture, political systems, level of education, level of industrial development Firms behave in a “Risk Averse” manner It means that when the perceived risk goes down, the firm increase its commitment to the foreign market \ The Haier Group Data Strategy Big DATA and Small DATA The use of small data to satisfy individual customers’ needs, however, the book mentions a huge cultural shock at the plant in Camden, south caroline Ex: top down, hard hat colors and hierarchy Culutral Differnces can have a huge impact on the internationalization of firms Kogut and Singh (1988)- Cultural Distance Index First statsical study on the implication of ciltiral distance to the selection of entry mode When investigating in culturally distant countries, foreign firms can choose to partner with foreign firms in order to gain local knowledge and share the risk associated to the investment (higher commitment = higher risk) How Companies Go Global Global sourcing The process of purchasing materials or services around teh world for local use Exporting Selling locally made products in foreign markets Importing Buying foreign made products and selling them domestically Exports correspond to what percentage of Candain GDP What countries are the major trending partners of Canada Management and Globalization How Companies Go Global Licensing Agreement One firm pays a fee for rights to make or sell another company’s products What are the potential risks associated to licesning The case of new balance in China Franchising A fee is paid for the rights to use another firms name, branding and methods Insourcing Insourcing: refers to local job creation that results from foreign direct investment Types of insourcing Joint ventures: operate in a foreign country through co-ownership by foreign and local partners Strategic alliances: A partnership in which foreign and domestic firms share resources and knowledge for mutual gains Foreign subsidiaries: local operation completely owned by a foreign firm Criteria for choosing a joint venture partner: Familiarity with your firm’s major business String local workforce Values its customers Future expansion possibilities Strong local market for partner’s own products Good Profit potential Sound financial standing Global business environments Legal and poliical systems Trade agreements and trade barriers Regional economic alliances Legal and political systems Differing laws and practices regards Business ownership Negotiation and implementation of contracts Foreign currency exchange Protection of intellectual property rights Counterfeit merchandise Political risk Potential loss in value of foreign investment due to instability and political changes in the host country Political risk analysis (expertise/experience) Forecast political disruptions that threaten the value of a foreign investment Changes in the rules of the game Brexit US Trade Wars-mexico-China Other examples Bolivia, Venezuela, China De-globalization The process of weakening interdependence among nations Trade Agreements and trade Barriers World trade organization Most favourd nation status Tariffs Nontariss barriers (quotes, restrictions, etc.) Protectionism Regional Economic Alliances USMCA (replacment for the NAFTA-North American Free trade Agreement) EU- European Union APEC- Aisa Pacific Economic Copperation ASEAN - Association of Southeast Asian Nationas SADC - Southern Africa Development Community MERCOSUR- Chapter 5- Global Management and Cultural Diversity (part 2) Review Types of global business Global corporation MNE (multinational enterprise) or MNC (multinational corporation) with extensive business operations in more than one foreign country Transnational corporation A global corporation that operates worldwide on borderless basis Some host country complaints about MNCs Host Country companits about MNCs: Excessive profits Interference with local government Domination of local economy Interference with local government Hiring the best local talent Limited technology transfer Disrespect for local customers Examples - War in Ukraine Disruption in global -value chains and increased pressure and interference of MNCs with local government Fertilizer imports in Brazil (one of the major producers of agricultural commodities) We must consider the triple bottom line and the impact in society, the environment and the economy $2.5 billion invest in potash mine in Brazill What about Globalization gap Large multinationals adn industrilizednaitons gaining disporoportinonally form globalization Globalization gap: Large multinational and industrialized nations gaining disproportionally from Globalization Some MNC complaints about host countries MNC Complaints about host countries: Profiit limitations Laws and regulations Overpirce resources Exploitative rules Foreign exchange restriction Failure to uphold contracts Mutual benefits for host countries and multinational companies Mutual benefits for host country and global corporation of MNC: Shared growth opportunities Shared income opportunities Shared learning opportunities Share development opportunities Develop projects together What are some of the ethical challenges for global business Ethincal challenges for global business Child labour Employmnet of children for worl otherwise done by adults Sweatshops Employment of workers at very low wages for long hours in poor working conditions Ex: Nike bad labour prices Unsafe working conditions Corruption Illegal practices that further one’s business interests Corrupiotn of froeign public officials Act makes it illegal for Candain firms and their representatives to engage in corrupt practices overseas Bribes to foreign officials Excessive commissions Non-monetary gifts Sweatshops Conflict materials What is culture Culture : The shared set of beliefs, values, and patterns of behvaiourr common to a group of people Food preferences Values and traditions Language and beliefs Religion Art music Life style Hofstede defines culture as: “The collectiv programing of teh mind distinguishing the members of one group or category of people from others” What is culture shock Culture Shock: Confusion and discoumfert a person experiences in an unfaamiliar culture Stages to adjusting to a new culture Confusion Small vitorires The honeymoon Irritation and anger Reality Cultural Intelligence The ability to adapt and adjust to new cultures What is Ethnocentrism Tendency to consider one’s own culture as superior others Slinet languages of culture Contect Low context High context Space Proxemics Ex: personal space Time Monochronic Polychronic High and low contexts cultures Edward T.Hall (1959) Def: Part of a discourse that surround a word or passage and can throw on its meaning Low context cultures Emphizes communication via spoken or written words Countries like United States, Canada and Germany High context cultures Rely on nonverbal and situational cues as well as on spoken or written works Thailand Malaysia Time Monochronic cultures People tend to do one thing at a time Canda Polychronic cultures Time is used to accomplish many different things at once Egypt Space Proxemics Study of how people use space to communicate In North American people value “personal space’ Many Latin and Asian cultures expect much less personal space Tight and Loose Cultures Cultural tightness-looseness Tight = Strength of norms that govern social behvaviour Japan, Korea, Malaysia Loose = tolerance for any deviation from norms Australia, Brazil, Hungary Values and national cultures (Hofstede) Power distance Uncertainty avoidance Individalism-collectivism Masculinity-femininty Time Orientation Indulgence vs. Restraint Comparative management How management pratices systematically differ among countries and /or cultures Intercultural competencies Skills and personal characteristics that help us be successful in cross cultural situations Global Managers (know how to adapt) Need to successfully apply management functions across interantional boundaries Global Learning goals Not universal Engage critical thinking Look everywhere for new management ideas Always consider culture

Generate exact multiple choice questions as give below 1. **Which round of negotiations led to the establishment of the World Trade Organization (WTO)?** - (a) Doha Round - (b) Tokyo Round - (c) Uruguay Round - (d) Kennedy Round **Answer:** (c) Uruguay Round 2. **The General Agreement on Tariffs and Trade (GATT) dealt with:** - (a) Goods only - (b) Services only - (c) Intellectual property only - (d) All of the above **Answer:** (a) Goods only 3. **The 'National Treatment' principle means:** - (a) Exported products are treated equally in the domestic market - (b) Imported goods are treated the same as local goods in the domestic market - (c) Exported products should have the same tariff - (d) None of the above **Answer:** (b) Imported goods are treated the same as local goods in the domestic market 4. **'Bound tariff' refers to:** - (a) A limit on tariffs for imports based on WTO commitments - (b) The tax rate on all exports - (c) The overall cost of tariffs - (d) A tariff-free trade condition **Answer:** (a) A limit on tariffs for imports based on WTO commitments 5. **The Most-Favoured Nation (MFN) principle ensures:** - (a) Equal treatment for all WTO members - (b) Only certain countries receive benefits - (c) Tariffs are raised annually - (d) One country is favored over others **Answer:** (a) Equal treatment for all WTO members 6. **The Agreement on Agriculture includes commitments in:** - (a) Market access, domestic support, and export subsidies - (b) Increasing crop yield and technology access - (c) Subsidizing imports only - (d) Agricultural tariffs only **Answer:** (a) Market access, domestic support, and export subsidies 7. **Which agreement replaced the Multi-Fiber Arrangement (MFA)?** - (a) Agreement on Textiles and Clothing - (b) Agreement on Agriculture - (c) TRIPS Agreement - (d) Technical Barriers to Trade Agreement **Answer:** (a) Agreement on Textiles and Clothing 8. **The WTO's TRIPS Agreement pertains to:** - (a) Agricultural products - (b) Intellectual property rights - (c) Investment measures - (d) Customs valuation **Answer:** (b) Intellectual property rights 9. **The Doha Round primarily focuses on:** - (a) Tariffs on manufactured goods - (b) Trade in agricultural goods - (c) Technology trade - (d) Intellectual property in medicine **Answer:** (b) Trade in agricultural goods 10. **The WTO aims to:** - (a) Restrict all trade - (b) Facilitate free and fair trade - (c) Promote monopoly - (d) Limit member negotiations **Answer:** (b) Facilitate free and fair trade 11. **RTAs aim to:** - (a) Block international trade - (b) Reduce trade barriers within a group of countries - (c) Increase tariffs among members - (d) Promote non-trade-related policies **Answer:** (b) Reduce trade barriers within a group of countries 12. **Customs unions require members to:** - (a) Keep individual external tariffs - (b) Impose the same external tariff on non-members - (c) Remove tariffs only temporarily - (d) Avoid any tariffs within the union **Answer:** (b) Impose the same external tariff on non-members 13. **The WTO's highest decision-making body is:** - (a) General Council - (b) Ministerial Conference - (c) TRIPS Council - (d) Dispute Settlement Body **Answer:** (b) Ministerial Conference 14. **Which principle prevents discrimination between WTO members?** - (a) MFN - (b) National Treatment - (c) Market Access - (d) Subsidy Reduction **Answer:** (a) MFN 15. **A common market involves:** - (a) A shared currency - (b) Free movement of goods, services, and factors of production - (c) Only trade agreements for goods - (d) No tariffs on agriculture **Answer:** (b) Free movement of goods, services, and factors of production 16. **The Agreement on Subsidies and Countervailing Measures addresses:** - (a) Trade in textiles - (b) Subsidies that distort trade - (c) All intellectual property laws - (d) Agricultural trade only **Answer:** (b) Subsidies that distort trade 17. **The WTO's TRIMs Agreement regulates:** - (a) Investments - (b) Trade in goods - (c) Trade in services - (d) Agricultural products **Answer:** (a) Investments 18. **The primary goal of the WTO's SPS Agreement is:** - (a) To allow subsidies on food exports - (b) To prevent arbitrary sanitary restrictions on trade - (c) To regulate intellectual property - (d) To impose environmental standards **Answer:** (b) To prevent arbitrary sanitary restrictions on trade 19. **A trading bloc is:** - (a) A group of countries with no trade agreements - (b) A group of countries that may have a common external tariff - (c) Only formed by countries from the same continent - (d) An agreement that restricts all trade **Answer:** (b) A group of countries that may have a common external tariff 20. **The GATT was succeeded by the WTO because:** - (a) GATT was only for developed countries - (b) WTO covers more areas like services and intellectual property - (c) GATT was non-binding - (d) WTO allows subsidies for agriculture **Answer:** (b) WTO covers more areas like services and intellectual property Certainly! Here are an additional 30 multiple-choice questions based on the document content, with answers provided after each question. --- ### Additional Questions and Answers 21. **The WTO’s Agreement on Technical Barriers to Trade (TBT) seeks to:** - (a) Restrict imports to a minimum - (b) Prevent standards from becoming unnecessary trade barriers - (c) Allow countries to set any standard for goods - (d) Promote only national standards for products **Answer:** (b) Prevent standards from becoming unnecessary trade barriers 22. **The Trade Policy Review Mechanism (TPRM) is designed to:** - (a) Impose tariffs on certain goods - (b) Regularly review and assess national trade policies - (c) Regulate customs duties globally - (d) Control intellectual property rights **Answer:** (b) Regularly review and assess national trade policies 23. **The principle of “progressive liberalization” means that:** - (a) Trade barriers are reduced gradually over time - (b) All tariffs are removed immediately - (c) Only developed countries reduce trade barriers - (d) No commitments are required from developing countries **Answer:** (a) Trade barriers are reduced gradually over time 24. **Which council oversees the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)?** - (a) General Council - (b) Services Council - (c) TRIPS Council - (d) Agriculture Council **Answer:** (c) TRIPS Council 25. **The WTO’s 'Dispute Settlement Body' is responsible for:** - (a) Deciding on national trade policies - (b) Settling trade disputes between member countries - (c) Creating new trade agreements - (d) Setting tariffs for member countries **Answer:** (b) Settling trade disputes between member countries 26. **A customs union differs from a free trade area because it:** - (a) Allows tariffs between member countries - (b) Establishes a common external tariff for non-members - (c) Applies only to services - (d) Imposes import quotas on all goods **Answer:** (b) Establishes a common external tariff for non-members 27. **Which of the following agreements deals with cross-border investments?** - (a) TRIPS - (b) TBT - (c) TRIMs - (d) GATS **Answer:** (c) TRIMs 28. **In a preferential trade agreement, member countries:** - (a) Impose the same tariffs as non-members - (b) Reduce trade barriers for each other only - (c) Apply high tariffs to non-member countries - (d) Have no external trade barriers **Answer:** (b) Reduce trade barriers for each other only 29. **The WTO’s Agreement on Agriculture includes which commitment?** - (a) Export subsidies for all agricultural goods - (b) Reduction of domestic support for farmers - (c) Complete elimination of tariffs on food products - (d) Increase in import quotas on agricultural goods **Answer:** (b) Reduction of domestic support for farmers 30. **The Agreement on Anti-Dumping allows countries to:** - (a) Increase exports by lowering prices - (b) Impose duties on imports sold below fair market value - (c) Eliminate all tariffs on certain goods - (d) Restrict domestic production of certain goods **Answer:** (b) Impose duties on imports sold below fair market value 31. **The main objective of WTO’s “National Treatment” principle is to:** - (a) Prevent imports altogether - (b) Treat foreign goods the same as domestic goods - (c) Impose tariffs on all foreign products - (d) Promote exports **Answer:** (b) Treat foreign goods the same as domestic goods 32. **Which of the following is a major goal of the WTO?** - (a) Ensuring trade restrictions remain high - (b) Promoting international free trade and competition - (c) Limiting access to global markets - (d) Supporting only developed countries **Answer:** (b) Promoting international free trade and competition 33. **An economic and monetary union involves:** - (a) A free trade area only - (b) A common currency among members - (c) No external trade agreements - (d) Different currencies for each member country **Answer:** (b) A common currency among members 34. **The WTO's Ministerial Conference meets:** - (a) Annually - (b) Every two years - (c) Quarterly - (d) Every five years **Answer:** (b) Every two years 35. **The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) mandates:** - (a) Free trade for all countries - (b) Uniform intellectual property protection standards - (c) Different IP laws for each country - (d) No IP protection for developing countries **Answer:** (b) Uniform intellectual property protection standards 36. **The WTO principle of 'transparency' requires member countries to:** - (a) Keep trade policies secret - (b) Publicly disclose trade policies and practices - (c) Have identical trade policies - (d) Eliminate tariffs on all goods **Answer:** (b) Publicly disclose trade policies and practices 37. **One of the WTO's objectives in dispute settlement is to:** - (a) Resolve trade disputes peacefully - (b) Impose sanctions on non-members - (c) Regulate global tariffs - (d) Control member states' import quotas **Answer:** (a) Resolve trade disputes peacefully 38. **Under the WTO's Market Access commitment, member countries agree to:** - (a) Allow unrestricted imports - (b) Set maximum tariff levels on imported goods - (c) Ban certain goods from other countries - (d) Only trade with specific countries **Answer:** (b) Set maximum tariff levels on imported goods 39. **GATS, or the General Agreement on Trade in Services, governs trade in:** - (a) Agricultural goods - (b) Intellectual property - (c) Services - (d) Manufactured products **Answer:** (c) Services 40. **The Agreement on Pre-shipment Inspection (PSI) aims to:** - (a) Ensure high tariffs on all imports - (b) Allow for inspection of goods before shipping - (c) Eliminate export taxes - (d) Control intellectual property trade **Answer:** (b) Allow for inspection of goods before shipping 41. **Which of the following agreements aims to harmonize customs valuation?** - (a) Anti-Dumping Agreement - (b) Customs Valuation Agreement - (c) TRIMs Agreement - (d) Agreement on Subsidies **Answer:** (b) Customs Valuation Agreement 42. **A significant aspect of the Doha Round is:** - (a) Reducing tariffs on agricultural products - (b) Restricting intellectual property rights - (c) Eliminating all forms of trade - (d) Blocking services trade agreements **Answer:** (a) Reducing tariffs on agricultural products 43. **The term “dumping” in international trade refers to:** - (a) Exporting goods at prices lower than domestic market prices - (b) Importing goods illegally - (c) Increasing domestic prices - (d) Imposing excessive tariffs **Answer:** (a) Exporting goods at prices lower than domestic market prices 44. **WTO members are expected to follow which key principle in reducing tariffs?** - (a) National Treatment - (b) Progressive Liberalization - (c) Quota System - (d) Non-Discrimination **Answer:** (b) Progressive Liberalization 45. **The WTO aims to promote fair competition by:** - (a) Allowing tariffs as the only form of protection - (b) Supporting MFN and anti-dumping measures - (c) Limiting access to agricultural products - (d) Increasing subsidies **Answer:** (b) Supporting MFN and anti-dumping measures 46. **A plurilateral agreement within the WTO:** - (a) Includes all WTO members - (b) Involves only specific countries with shared interests - (c) Bans all tariffs for members - (d) Imposes global trade restrictions **Answer:** (b) Involves only specific countries with shared interests 47. **Trade facilitation in the WTO context means:** - (a) Making trade faster, cheaper, and more predictable - (b) Increasing tariffs on imports - (c) Eliminating all customs procedures - (d) Restricting trade with non-members **Answer:** (a) Making trade faster, cheaper

Broken windows are covered. Floorboards are patched and doors screwed back on. The road that was ruined by German tanks is shovelled and raked smooth. Boot-shaped bruises turn yellow then fade and disappear. Flowers grow and spread across the ugly German footprints stomped into garden beds. The village looks pretty once more. School stops for the summer and everyone is put to work on the kolkhoz, the village farm. Women and big boys begin harvesting the barley crops in the outer fields. The biggest girls milk the cows, morning and night, and keep the barns clean. Old Nikolay mends ploughs, horse harnesses, pitchforks and scythes in his workshop. Anna Pushinka teaches Yelena and her friends how to get the honey from the beehives that are scattered through the orchards. I am in charge of collecting eggs. My friends Olga and Nina help. Olga and Nina are five, a year younger than me. They are twins and look exactly alike, except Nina’s nose is a little bit crooked from when she fell out of bed and squashed it sideways on the floor. The hens, ducks and geese wander free in the summer, so collecting eggs is like a treasure hunt and takes hours. Catching the hens for their daily hugs takes even longer, but I think it’s important because hugs make everyone happy and happy hens lay bigger eggs. Olga says I’m the best hen-hugger in all of Russia. Nina says I’ll be the best cow-hugger, too, when my arms grow longer. But good hugs have nothing to do with the size of your arms. It’s all to do with the size of your heart. When we are done with the hens, Olga, Nina and I can spend the rest of the day doing whatever we like. We climb the apricot trees, chase squirrels, lie in the meadow marvelling at how hot Ushanka’s black fur becomes in the sunshine, make daisy chains and race little boats of bark in the stream. I teach Olga and Nina the alphabet and we use charcoal to write our letters and our names all over the village – on doors and walls and the freshly cut ends of firewood. In between, I practise my knots. In case the German princemonsters return. I slip into Old Nikolay’s workshop and tie knots in the harnesses hanging on the walls. I wander into gardens where the washing is hung out to dry and tie knots in the laces on pants and smocks. I creep up behind Anna Pushinka and tie knots in her apron strings. I find baling twine in the hay shed and tie my own ankles together. I do such a good job of these last knots that I can’t get them undone. I have to jump all the way to Olga and Nina’s house and ask them to cut me free with their mama’s knife. At the end of each day, Ushanka and I run out into the distant barley fields to meet Mama. This is my favourite part of the day, because Mama always shouts, ‘Little Rabbit!’ and smothers my head with kisses. And as we walk home, we sing. Everyone – women, big boys and me. I love to sing. Almost as much as I love to be kissed by Mama. Sometimes one of the boys, Mikhail, has his balalaika with him. He takes the instrument out from beneath the sheaves of barley piled high on the wagon and plays music. We sing about forests and orchards and people who find their true love. As we walk home, arm in arm, my heart fills with happiness and my belly swells with pride that I am allowed to sing along with the big boys. And I can almost forget about the German prince-monsters and their lies about Russia and their big ugly boots. Almost. But today, when Mikhail reaches for his balalaika, I see other things hiding beneath the barley sheaves. Three of the mamas rush forward and cover them up, but it’s too late. I know they are there. I’ve already seen them. Rifles. Lots of rifles. Mikhail hugs his balalaika to his chest and blushes. ‘So play!’ cries Mama, her voice oddly loud and high. ‘Let’s play Sasha’s favourite song, “The Little Birch Tree”.’ So Mikhail plays and everyone sings about the lovely birch tree with its curly leaves and the branches that will be turned into silver flutes. They sing too quickly, too loudly, and as they sing and walk, they cast nervous sideways glances at me. ‘It’s alright,’ I say, when the song comes to an end. ‘I didn’t see the rifles.’ Mama nods and smiles, and I know it was the right thing to say. But I did see the rifles. And I think about Yelena wanting to get lots of guns and dynamite for the Partisans so they can shoot the Germans and blow them into thousands of tiny pieces, and Mama looking as though she agreed, and I know this is what the mamas and the big boys are doing. As well as harvesting, they are helping the Partisans. Three days later, I wake before dawn and I am all alone. Yelena is always here beside me when I wake. But not this morning. I climb down from our bed above the stove. Mama is filling a cloth sack with bread. She ties it closed with a piece of string and hands it to Yelena. ‘Stay out of sight,’ says Mama. ‘And don’t return until after dark.’ ‘Where’s she going?’ I ask. ‘Nowhere,’ snaps Mama. ‘Then why does she need all that bread?’ I ask. ‘There’s nothing left for us.’ Mama baked four loaves last night and she has stuffed them all into the sack. Yelena opens her mouth, but before she can speak, Mama shoves her out the door and sends her on the way to nowhere. Mama turns and stares at me, her blue, blue cornflower eyes wide with worry. ‘I know,’ I say, flopping down on the bench. ‘I didn’t see any bread.’ Mama sits beside me and takes my hand. ‘And . . .?’ she prods, obviously waiting for more. I puzzle for a while, then say, ‘And I don’t have a sister called Yelena.’ Mama laughs, softly and with a little bit of sadness around the edges. ‘Sweet Little Rabbit! You do have a sister called Yelena.’ ‘I do?’ I ask, now confused. ‘I haven’t seen the rifles or the bread, but I have seen Yelena?’ ‘Yes.’ Mama smiles and the magic makes me smile, too. And I am glad that Yelena is real because I love her very much. ‘Yelena is real,’ Mama explains, ‘but she does not carry sacks of bread into the forest for the Partisans.’ ‘Of course not!’ I shout, slapping my forehead. ‘Because there is no bread!’ Mama laughs loudly now, with not a hint of sadness. She hugs me, pressing me against her warm, loving heart, covering my head with kisses. ‘Clever Little Rabbit,’ she murmurs, and then, in barely a whisper, ‘Your papa would be so proud.’ When I wake the next morning, Yelena is sleeping beside me, her mouth open, her braided hair unravelling. Mama is serving kasha to a strange woman seated at our table. I crawl down from above the stove and slide along the bench beside her. I stare at her pants, her tunic, the rope she is using as a belt and her big boots. She’s dressed like a man! And there’s a rifle leaning against the wall near the door. ‘Hello,’ I say. ‘I’m Sasha.’ The woman doesn’t reply. She just shovels down her kasha. I line my four wooden bears along the table in front of her bowl and say, ‘These are my bears: Big Bear, Medium Bear, Little Bear and Even Littler Bear.’ ‘Hello, Sasha. Hello, bears.’ She smiles but she doesn’t tell me her name. ‘Why are you dressed like a man?’ I ask, tugging at the sleeve of her tunic. ‘Because men’s clothes make it easier to run and climb and crawl and shoot,’ she says. ‘You’re a Partisan!’ I gasp. ‘But she’s not real,’ says Mama, placing a bowl of kasha before me. ‘Is the kasha real?’ I ask. Mama laughs. ‘Yes, Little Rabbit.’ I’m glad the food is real, because I’m hungry. But I’m disappointed that the woman is not real. I was going to ask if I could use her rope-belt to tie her ankles together. For practice. But if she’s not real, then the rope and her ankles aren’t either. The woman finishes her kasha, hangs her rifle over her shoulder, kisses Mama on the cheek then slips out the door. I run to the window to watch her leave, but by the time I get there, she’s gone. Vanished. ‘Because she’s not real,’ I whisper. A week later, Mama and I are working in the garden. We sing as we weed between the flowers and pluck caterpillars from the vegetables. Anna Pushinka is picking strawberries in her garden and wanders over. ‘Taste these,’ she says, holding out the basket. Mama reaches in and takes out a fat strawberry and a tiny piece of folded paper. The strawberry goes into her mouth, the paper into her pocket. ‘What’s on the paper?’ I ask. ‘Paper?’ Anna Pushinka replies with a wave of her hand. ‘Goodness, Sasha! Who has money for paper? These are lean times. We must choose between paper for writing and noodles for our soup. And I always choose noodles.’ She chuckles and I know the paper is yet another thing that is not real. That night, Mama slips the paper to Yelena, but she drops it on the floor. I pick it up for her, and I see that there are tiny words and numbers written all over it. I wish I could read better. I’m desperate to know what it says. Or rather, what it doesn’t say, because it’s not real. Later, when Mama has tucked us into our bed above the stove and Ushanka has wrapped herself around the top of my head, I ask Yelena, ‘What’s on the paper?’ ‘What paper?’ says Yelena. ‘The paper that isn’t real,’ I reply. Yelena stares at me, nibbling her lip, then whispers, ‘A message for the Partisans. Stuff about where the Germans have their headquarters and when their trains are travelling and where they store their ammunition.’ ‘Why?’ ‘So the Partisans can blow them up.’ Yelena grabs my arm. ‘But don’t tell anyone. It’s a secret.’ ‘What’s a secret?’ I ask. ‘The message.’ ‘What message?’ I say, my eyes wide. Yelena laughs. ‘Good boy, Sasha.’ My belly swells with pride. I know how to play this game. ‘How are your knots coming along?’ asks Yelena. ‘Good! Yesterday, I crept into the dairy and tied knots in the apron strings of all the girls who were milking and only one of them noticed. Today, I tied Olga’s ankles together with Mama’s embroidery thread and just now, while you were taking a bath, I tied the sleeves of your blouse together in an enormous knot.’ Yelena rolls her eyes, then says, ‘I’ll see if I can find you some rope for practising.’ ‘Practising what?’ I ask. ‘Your knots,’ she says. ‘What knots?’ Yelena, my big sister who is twelve and always serious t

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