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Harper Adams MSc International Agri-Business International Agri Trade & Export Management: practice questions

Harper Adams MSc International Agri-Business · UK · Harper Adams University

Original practice questions written to the published syllabus · not past papers
10worked here, free
39written to this exam in this subject
9syllabus units

What this subject covers

Why countries trade, how trade is measured and regulated, and how an agribusiness actually exports.

In the exams: agricultural economics PhD entrance and fellowship examinations, trade (heavy); agribusiness management PhD entrance and fellowship examinations, international marketing (heavy); agricultural master's entrance examinations, WTO and trade (present)

Where the 39 questions fall

How our questions for Harper Adams MSc International Agri-Business spread across the units of International Agri Trade & Export Management. Difficulty: 10 easy, 20 medium, 9 hard.

Export procedures and documentation14
International marketing mix7
Market-entry modes6
Porter's diamond4
Tariffs and non-tariff measures2
TRIPS, TRIMs, SPS and TBT agreements2
Export promotion organisations2
Product life-cycle theory of trade1
Exchange rates1

10 practice questions, worked

Choose an answer, then open the working. Each explanation says why the right answer is right and why the others are not.

1 · Porter's diamond · easy

In Porter's diamond, the two variables that influence the system from outside the four determinants are:

  1. Exchange rates and interest rates
  2. Chance and government
  3. National culture and religion
  4. Tariffs and import quotas
Answer and working

B. Chance and government

Porter treats chance events (inventions, wars, shifts in demand) and government policy as external influences on all four corners.

Further reading: Porter (1990)

2 · TRIPS, TRIMs, SPS and TBT agreements · medium

A government requires a foreign-owned food processor to source at least half of its raw material from domestic farms as a condition of investment approval. This is:

  1. A valid TBT technical regulation on food quality and traceability
  2. A local-content requirement prohibited under the TRIMs Agreement
  3. A permitted SPS measure
  4. A green-box subsidy
Answer and working

B. A local-content requirement prohibited under the TRIMs Agreement

Local-content requirements violate GATT Article III national treatment and are on the TRIMs illustrative list of prohibited measures.

Further reading: WTO TRIMs Agreement

3 · Export procedures and documentation · easy

FOB value is 10,000, sea freight 800 and marine insurance 50. The CIF value is:

  1. 10,800
  2. 10,050
  3. 9,150
  4. 10,850
Answer and working

D. 10,850

CIF = FOB + freight + insurance = 10,000 + 800 + 50 = 10,850. 10,800 omits insurance, 10,050 omits freight, and 9,150 subtracts both instead of adding.

Further reading: ICC Incoterms 2020 and UCP 600

4 · Export procedures and documentation · medium

Which Incoterms rules may be used only for sea and inland waterway transport?

  1. FAS, FOB, CFR and CIF
  2. FOB, FCA, CIF and CIP
  3. EXW, FCA, CPT and CIP
  4. DAP, DPU, DDP and FCA
Answer and working

A. FAS, FOB, CFR and CIF

Four rules are sea-only; the other seven (EXW, FCA, CPT, CIP, DAP, DPU, DDP) suit any mode, including containers handed over inland.

Further reading: ICC Incoterms 2020 and UCP 600

5 · Export procedures and documentation · easy

Documentary letters of credit are governed by the ICC rules known as:

  1. Incoterms 2020
  2. UCP 600
  3. CISG
  4. URC 522
Answer and working

B. UCP 600

UCP 600 governs documentary credits; URC 522 governs documentary collections; Incoterms allocate costs and risks; CISG is the UN sales convention.

Further reading: ICC Incoterms 2020 and UCP 600

6 · Export procedures and documentation · medium

Pre-shipment (packing) credit is used by an exporter to finance:

  1. The period between shipment and receipt of payment from the buyer
  2. Long-term purchase of plant and machinery
  3. Import duties in the buyer's country
  4. Buying, processing and packing
Answer and working

D. Buying, processing and packing

Packing credit covers working capital before shipment; post-shipment credit covers the gap from shipment to realisation, often by discounting export bills. Packing credit pays for purchasing, processing and packing the goods before shipment.

Further reading: Standard export finance texts

7 · Market-entry modes · easy

Which market-entry mode involves the lowest resource commitment and control for a firm?

  1. Wholly owned subsidiary
  2. Joint venture
  3. Licensing a foreign manufacturer, with quality control and royalty payments
  4. Indirect exporting through a home-country merchant exporter
Answer and working

D. Indirect exporting through a home-country merchant exporter

Indirect exporting leaves foreign marketing to intermediaries: low cost and risk, little control or market learning. Subsidiaries and joint ventures need investment.

Further reading: Cateora et al., International Marketing

8 · Market-entry modes · medium

The Uppsala internationalisation model holds that firms:

  1. Choose markets only by factor endowments
  2. Always prefer licensing to exporting
  3. Enter all markets simultaneously with wholly owned subsidiaries to gain first-mover advantage
  4. Expand gradually, starting with psychically close markets and low-commitment modes
Answer and working

D. Expand gradually, starting with psychically close markets and low-commitment modes

Johanson and Vahlne (1977) described incremental internationalisation driven by experiential knowledge, beginning in culturally close markets with occasional exports and moving to agents, subsidiaries and production.

Further reading: Johanson and Vahlne (1977)

9 · International marketing mix · easy

In Perlmutter's EPRG framework, a firm that treats each country market as unique and adapts its marketing to each is:

  1. Geocentric
  2. Ethnocentric
  3. Regiocentric
  4. Polycentric
Answer and working

D. Polycentric

Polycentric firms adapt country by country; ethnocentric firms apply home practices; regiocentric firms treat regions as units; geocentric firms see the world as one market with local adaptation where needed.

Further reading: Cateora et al., International Marketing

10 · Export promotion organisations · medium

The International Trade Centre (ITC) in Geneva is:

  1. The customs classification body
  2. The WTO's dispute settlement body, which hears complaints about developing-country exports
  3. A joint WTO-United Nations agency supporting exporters in developing countries
  4. A private chamber of commerce that publishes the Incoterms rules and model contracts
Answer and working

C. A joint WTO-United Nations agency supporting exporters in developing countries

The ITC, jointly run by the WTO and the UN (through UNCTAD), provides market intelligence and capacity building. Incoterms come from the ICC; HS from the WCO.

Further reading: International Trade Centre

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Read the subject

International Agri Trade & Export ManagementThe full study manual, free Harper Adams MSc International Agri-BusinessFormat, sections and how it has changed

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