BA 361 Exam 2
Business Administration 361 with Anderson/baker at University of Tennessee - Knoxville
About this deck
By: wesley ring
Created: 2011-03-01
Size: 60 flashcards
Views: 1783
Created: 2011-03-01
Size: 60 flashcards
Views: 1783
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Russia
Currency: Ruble
GDP: 1.23 Trillion, (12th largest in the world)
President: Dmitry Medvedev
Prime Minister: Vladamir Putin
Standard of Living: $8,700 (right around world average)
Main Exports: Crude Oil, Petroleum Oil
GDP: 1.23 Trillion, (12th largest in the world)
President: Dmitry Medvedev
Prime Minister: Vladamir Putin
Standard of Living: $8,700 (right around world average)
Main Exports: Crude Oil, Petroleum Oil
Brazil
Currency: Real
GDP: 1.573 Trillion (8th largest in the world)
President: Dilma Rouseff
Standard of Living: $8,700 (close to world average)
Main Exports: Ore (mostly Iron), Mineral Fuels
GDP: 1.573 Trillion (8th largest in the world)
President: Dilma Rouseff
Standard of Living: $8,700 (close to world average)
Main Exports: Ore (mostly Iron), Mineral Fuels
Mexico
Currency: Peso
GDP: 875 Billion (18th largest in the world)
President: Felipe Caulderon
Standard of Living: $8,100 ( close to world average)
Main Exports: Autos and parts, Mineral Fuels (petroleum, crude and not)
GDP: 875 Billion (18th largest in the world)
President: Felipe Caulderon
Standard of Living: $8,100 ( close to world average)
Main Exports: Autos and parts, Mineral Fuels (petroleum, crude and not)
Thailand
Currency: Baht
GDP: 264 Billion
King: Bhumibol Adulyadej (65 year reign)
Prime Minister: Abhisit Vijjajiva
Standard of Living: $3,900
Main Exports:Vehicles, Rubber, Computers
GDP: 264 Billion
King: Bhumibol Adulyadej (65 year reign)
Prime Minister: Abhisit Vijjajiva
Standard of Living: $3,900
Main Exports:Vehicles, Rubber, Computers
Consumer and Producer Surplus
Consumer: above equilibrium
Producer: below equilibrium
Producer: below equilibrium
HHI (Herfindhal - Hirschman Index)
S1^2 + S2^2 + S3^2 .........
-make percentages integers, don't into decimal form
HHI over 1800: Highly Concentrated
HHI between 1000 and 1800: Moderately Concentrated
HHI under 1000: Un-concentrated
-make percentages integers, don't into decimal form
HHI over 1800: Highly Concentrated
HHI between 1000 and 1800: Moderately Concentrated
HHI under 1000: Un-concentrated
US emphasis on Anti-Trust
-Efficiency
-Ultimate Consumer
-trust in market to efficiently allocate resources
-reliance on price and welfare economics
--greater reliance on tech testimony
-court system allows/denies mergers
-Ultimate Consumer
-trust in market to efficiently allocate resources
-reliance on price and welfare economics
--greater reliance on tech testimony
-court system allows/denies mergers
EU emphasis on Anti-Trust
-Competition
-Consumer and Business
-trust in Govnt's ability to allocate resources
-reliance on industry HHI effects of merger
--greater reliance on market participants' testimony
-ECC acts as investigator, prosecutor, judge, and jury
-Consumer and Business
-trust in Govnt's ability to allocate resources
-reliance on industry HHI effects of merger
--greater reliance on market participants' testimony
-ECC acts as investigator, prosecutor, judge, and jury
Horizontal Merger
merger between two competitors or rivals in the same market
- concern - market power of the merged firm
- concern - market power of the merged firm
Vertical Merger
merger between two firms with potential actual buyer - seller relationships
- concern - foreclosure of part of the market
- concern - foreclosure of part of the market
Conglomerate Merger
merger that is neither horizontal nor vertical
- concern - possible bundling of the complementary goods
- concern - possible bundling of the complementary goods
Sherman Act
-made any act that "restricted trade" illegal
-made it illegal to attempt monopolization
-made it illegal to attempt monopolization
Clayton Act
-outlawed price discrimination
-prohibited mergers that reduced competition
-prohibited mergers that reduced competition
Federal Trade Commission Act
-created FTC ( 5 members )
-outlawed unfair methods of competition
-outlawed unfair methods of competition
Robinson - Patman Act
-prohibited selling products at unreasonable low prices
Free Trade Area
elimination of barriers between members
Customs Union
free trade among members plus a common external trade policy, raise barriers against other countries outside the union
Common Market
customs union plus allowing free movement of labor and capital
Economic Union
common market plus members coordinate economic policies
Political Union
merging into one country
Who makes up NAFTA
Canada
US
Mexico
US
Mexico
Who makes up CAFTA - DR
US
Dominican Republic
Costa Rica
El Salvador
Guatemala
Honduras
Nicaragua
Dominican Republic
Costa Rica
El Salvador
Guatemala
Honduras
Nicaragua
Mercosur
Argentina
Brazil
Paraguay
Uruguay Venezuela
Brazil
Paraguay
Uruguay Venezuela
4 Largest Trading Blocs (Economically)
1st - EU
2nd - NAFTA
3rd - ASEAN
4th - MERCOSUR
2nd - NAFTA
3rd - ASEAN
4th - MERCOSUR
Top 5 US trading partners (in order)
Canada
China
Mexico
Japan
Germany
China
Mexico
Japan
Germany
What are some of the top US exports
Cars
Industrial Merchandise
Chemicals
Aircraft
Industrial Merchandise
Chemicals
Aircraft
What are some of the top US imports
Crude oil
Cars
Computers
Cars
Computers
What are the 3 components of the Balance of Payments
Current Account
Capital Account
Financial Account
Capital Account
Financial Account
What makes up the Current Account
imports, exports, and transfers
What makes up the Capital Account
buying/selling non-financial assets
What makes up the Financial Account
purchase and sale of financial assets
Indirect Exporting
when a domestic firm sells its good/service to another domestic firm or intermediary and sells it abroad
Passive
-as part of an input to a downstream domestic firm
-sell to a wholesaler to then sells your product abroad
Active
-export management companies and export trading companies
Passive
-as part of an input to a downstream domestic firm
-sell to a wholesaler to then sells your product abroad
Active
-export management companies and export trading companies
Direct Exporting
when a domestic firm sells directly to a distributor or end-user abroad
-firm takes risk/responsibility for the exporting process
Direct selling through a distributor abroad
-distributor takes control and responsibility of the product
-reduces risk of the exporting firm
-firm takes risk/responsibility for the exporting process
Direct selling through a distributor abroad
-distributor takes control and responsibility of the product
-reduces risk of the exporting firm
Freight Forwarders
responsible for arranging optimal path of product from manufacturing pant to airport or seaport, through customs and onto foreign buyer
Advantages: Exporting
-low financial exporting
-allows for gradual entry
-can acquire knowledge about market
-allure of domestically produced product
-allows for gradual entry
-can acquire knowledge about market
-allure of domestically produced product
Disadvantages: Exporting
-vulnerable to tariffs and NTB's
-logistical complexities
-potential conflicts with distributors
-logistical complexities
-potential conflicts with distributors
Licensing
when one firm (licenser) leases the right to some intangible property right (patents, copyrights, trademarks, etc) to another firm (licensee) in return for a fee (royalty) for some agreed upon time
Franchising
when one firm (franchisee) operates its business under the name of another (franchiser) in return for a fee. Franchiser provides trademarks, brand reputation, training and support.
Management Contracts
one company simply contracts to provide managerial assistance or expertise for a specified period of time
Contract Manufacturing
method used by large and small firms whereby other firms provide most of the manufacturing of the actual product (outsourcing)
Turnkey
a contract between two firms whereby one designs, constructs, and equips the facility, and then turns it over to the second firm
Wholly Owned Subsidiaries
facility entirely owned and operated by a parent company
Can you run a Balance of Payments deficit or surplus?
No, that is impossible
Balance of Payments
the current account, capital account, and financial account must sum to zero
Metalwork Inc is ________ from Dining Tables R Us
upstream
Dining Rooms Wholesale is _______ from The Lumberyard
downstream
If Dining Tables R Us begins to make their own finished wood products, this is
known as
known as
backward integration
If Steel Corp. begin to produce dining room tables, this is known as
forward integration
If Metalwork Inc. and Dining Tables R Us were to merge, this is known as
vertical merger
If the Lumberyard and Metalwork Inc were to merge, this is known as
conglomerate merger
If Steel Corp and Metalwork Inc. were to merge, this is known as
horizontal merger
Which act created the FTC and outlawed unfair methods of competition?
Federal Trade Commission Act (1914)
What government agencies are given the majority of antitrust enforcement?
Department of Justice and the Federal Trade Commission
Which regulation theory involves “regulation as a means to protect industry” from itself and from new entrants?
capture theory
Suppose that Firms 5 and 6 began merger talks. What would the Department of
Justice probably do? Firm 5: 10% Firm 6: 8%
Justice probably do? Firm 5: 10% Firm 6: 8%
Not allow it, because it would entail an increase of over 100 in the HHI in an already moderately concentrated industry
Suppose that firms 6 and 7 began merger talks. What would the Department of
Justice probably do? Firm 6: 8% Firm: 4%
Justice probably do? Firm 6: 8% Firm: 4%
Would allow it, because the effect on the HHI is less than 100
Marginal Cost Pricing
-forces the monopolist to charge a price equal to its marginal cost
-pushes the outcome as close as possible to the competitive solution
-minimizes deadweight loss for society
-often results in economic losses for the monopoly
-pushes the outcome as close as possible to the competitive solution
-minimizes deadweight loss for society
-often results in economic losses for the monopoly
Average Cost Pricing
-creates more deadweight loss than marginal cost pricing, but less than if the
monopolist were unregulated
-forces the monopolist to charge a price equal to its average cost
monopolist were unregulated
-forces the monopolist to charge a price equal to its average cost
Civil Law
a legal system that's primary feature is that laws are written into a collection, codified, and not determined by judges
some facts are treated differently on different occasions
-Mexico and mostly all South America is Civil Law
some facts are treated differently on different occasions
-Mexico and mostly all South America is Civil Law
Common Law
its underlying principle is that it is unfair to treat similar facts differently different occasions
-US, Canada, India, Australia are the big players of Common Law
-US, Canada, India, Australia are the big players of Common Law
About this deck
By: wesley ring
Created: 2011-03-01
Size: 60 flashcards
Views: 1783
Created: 2011-03-01
Size: 60 flashcards
Views: 1783
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“I have used this website for three exams, and I see a huge difference in my test results.”
Naj
Naj