Question

Which of the following are generally true? (Mark all) a.As a firm's degree of globalization increases, is potential for outsourcing internal capabilities for gain advantage with product design increases.

b.Tariffs are the taxes that countries levy on imports from other countries.
c.Tariffs are the taxes that countries levy on exports to other countries.
d.As a firm's degree of globalization increases, unit production costs increase.

Answer 1

Tariffs are taxes placed on imported goods, and as a firm's degree of globalization increases, it may seek to outsource to reduce production costs and enhance product design capabilities.

Step-by-step explanation:

When analyzing the given propositions, two of them are generally true. First, tariffs are indeed taxes that governments place on imported goods, making option (b) correct. However, option (c) is incorrect as tariffs are not placed on exports but rather on imports. In terms of globalization, as a firm's degree of globalization increases, it often seeks to reduce unit production costs through economies of scale and potentially outsourcing to take advantage of lower cost structures in other countries; thus, option (d) is not generally true. Lastly, in an increasingly global business environment, firms often seek to outsource certain capabilities to leverage international expertise and innovation in product design, which supports option (a).