CBA 396 Chapter 5

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Switzerland exports cheese and chocolate because one of its factor endowments is lots of rich agricultural land.
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False
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Porter’s diamond can be used to explain the importance of the environment and natural resources.
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True
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Porter’s diamond model suggests that Switzerland should not be competitively successful
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False
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Porter suggests that adverse conditions can motivate innovation, which may lead to the development of a competitive advantage
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True
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With globally networked transportation, location does not matter as a basic factor condition.
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False
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Because Austria sided with the West in the Cold War, it became a favored location for offices of international firms servicing eastern European operations
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False
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Geographical proximity is rarely a major reason for trade
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False
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Mountains tend to impede trade, whereas flat areas tend to facilitate trade relationships
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True
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Mountain barriers found in the area of the Pakistan-Afghanistan border impede travel and separate populations
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True
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Switzerland, China, and Colombia are nations that present topographic challenges to marketers because their markets are divided by mountain ranges.
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True
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Every coast between 20 and 30 degrees of the equator (north or south) is dry.
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True
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Bodies of water, much like deserts and mountains, also serve as barriers to trade.
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False
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Climate differences explain differences in human and economic development because the less temperate climates limit mental powers.
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False
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Nonrenewable energy sources include coal, fossil fuels, and ocean thermal energy conversion.
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False
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Through 2035, fossil fuels are expected to remain the world’s dominant energy source.
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True
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China and India combined are using more marketed energy than is the United States, and this trend is projected to increase
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True
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Heavy oil is oil weighted down with an extra carbon molecule, and it can be gasified using the Fischer-Tropsch process.
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False
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Saudi Arabia and Canada have the largest proven oil reserves
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True
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The largest portion of proven oil reserves can be categorized as being at the highest level of investment risk
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True
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Nuclear power is a leading contributor to the French energy grid
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True
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Because it is a high polluter, coal is on the decline as an energy source.
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False
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Biomass is a category of renewable energy fuels based on their heavy weight
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False
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Sustainable approaches in business usually involve trade-offs such as lower profits compensated by reduced marketing costs and improved image/reputation
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False
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Limits, interdependence, and equity are characteristics of sustainable business practices
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True
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The stakeholder model for environmentally sustainable business has failed because we don’t have an accounting system to measure the present costs of environmental irresponsibility
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False
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Compassion has nothing to do with sustainable business. Business is business
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False
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Coal and nuclear power are both in decline as energy sources
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False
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Stakeholder theory suggests that balancing competing tensions in a business is impossible and that recognizing this early in the process is helpful
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False
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Triple-bottom-line accounting is an example of sustainability with economic, social, and environmental accountability
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True
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Interface, the manufacturer of Flor, is an example of a petroleum-based business that has developed a sustainable model
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True
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Environmental sustainability is about maintaining the environment, and it is both local and global
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True
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Environmentally sustainable businesses need to consider the economic and ecological systems in which they function, but not the social
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False
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Sustainable business practices have three characteristics: limits, interdependence, and equity.
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True
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The relationships among ecological, social, and economic systems in sustainable environments need to be
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Interdependent.
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The stakeholder model requires businesses to think about
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the network of tensions caused by competing demands
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Stakeholder theory pushes managers to be clear about how they want to do business, so it encourages
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recognition of and transparency with values and underlying principles.
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Interface, the producer of Flor carpeting, has a solid record in sustainable business practice and
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spins its products from petroleum
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Patagonia recognizes that doing business following the traditional approach, focusing on quarterly earnings, is not complete because this does not focus on:
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the negative impact of the business
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Chouinard, the founder of Patagonia, observed that
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no business can be done on a dead planet
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Physical barriers that have led to the development of separate languages in the same country are known as:
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topographical barriers
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With factor conditions, Porter’s diamond model distinguishes between basic factors, those a country inherits, and
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advanced factors, those a country can mold: labor and infrastructure
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Swiss exports are concentrated, high-density products that minimize the need for importing bulky materials because
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mountain ranges increase transport costs into and out of Switzerland and limit local resources.
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Geographical proximity contributes to:
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knowledge of the country by its neighbors; lower freight costs; the likelihood of trade relationships
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Topography, including mountains, deserts, plains, and bodies of water, greatly influences
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the physical distribution of products and services
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Nations whose mountains divide them into smaller regional areas include
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Switzerland, Afghanistan, China, and Colombia
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One example of the effect of topography is:
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isolated language groups, which require special marketing adjustments
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A good example of the relationship between water supply and population concentration is
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Australia
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In more dense populations, international managers can expect
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lower marketing and distribution costs
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Densely populated areas coincide with
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rivers, lakes, and seacoasts
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Climate influences:
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what people can do, physically and economically
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World Bank studies have shown that underdevelopment is often due to
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factors such as parasites and viruses that are a part of tropical climates and expand unchecked because of the lack of winter temperatures
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Petroleum, a relatively cheap nonrenewable energy source, is
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being increasingly depleted and is expected to run out in another 50 years, but in the meantime, improved retrieval techniques are being developed.
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The top four countries in proven reserves are
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Saudi Arabia, Canada, Iran, and Iraq
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Heavy oil is
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a group of unconventional oil sources such as oil sands, shale, coal, and natural gas, all of which via processing can yield oil.
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As an energy source, nuclear power
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A. is growing significantly, especially in developing countries. B. has been growing as the price of oil climbs and cleaner energy sources (nonpolluting) are sought. C. has been exploited by France, which has one of the lowest greenhouse gas emissions in the industrialized world. ****D. all of the above.****
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Coal pollutes heavily
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yet its consumption has increased and is projected to continue on this trend, especially in China and India. and contributes to greenhouse gas emissions, especially in China, India, and the United States
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Renewable energy sources
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will replace fossil fuels, due to price, depletion, or carbon emissions. are growing at greater rates than the nonrenewables in the United States and Europe
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The area with the greatest capacities in renewables as of 2010 is
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European Union
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Nonfuel minerals
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A. include chrome, manganese, platinum, and arsenic, all necessary for modern living. B. are mostly sourced through imports in the United States. C. frequently originate in China. ***D. all of the above.****
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Environmental sustainability is both local and global because:
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environmental conditions do not recognize national borders
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The three characteristics of evolving sustainable business practices are
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limits, interdependence, and equity
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Sam Palmisano, CEO of IBM, has described a new way of doing business that goes to equity of distribution by observing that
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IBM would end its colonial company model and move on to an integrated model with high levels of trust among stakeholders
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Stakeholder theory is an understanding of how business works that
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takes into account all identifiable interest holders
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A way to measure a company’s success in sustainable business practices is:
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triple-bottom-line accounting
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A specific example of a sustainable business is Patagonia, as evidenced in its
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Footprint Chronicles program that addresses the trade-offs global sourcing creates and evaluates the impact of sourcing decisions. ecosystem model of sustainability that relies on the synergies between financial, environmental, and social elements.
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Porter’s diamond is a model that offers an explanation of:
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differing levels of success among the national players in world markets
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Proximity is a factor in explaining
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the number of a nation’s political and trade relationships
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Climate is probably the most important element of the physical forces, as it sets the limits on
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what people can do physically and economically
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The main transportation artery of Europe is the
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Rhine waterway
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Bodies of water that provide inexpensive access to interior markets are known as:
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inland waterways
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Every continent has inland waterways that provide inexpensive access to interior markets except
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Australia.
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The North-South divide uses climatic differences to explain:
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differences in human development
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Studies conducted by the World Bank indicate that tropical climates allow for
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the unimpeded reproduction and growth of weeds, viruses, birds, insects, and parasites
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Natural resources are
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anything provided by nature on which people depend
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The marketed energy use has been dominated since 1980 by
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nonrenewable energy sources
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The International Energy Agency 2010 report observes that an energy revolution underway may well lead to:
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a 27 percent drop in oil usage
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Unconventional sources of petroleum such as oil sands and shale are often grouped together and referred to as:
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heavy oil.
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This material, when heated to 500°C, will yield 25 liters or more per ton of input:
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shale
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The largest portion of the world’s proven oil reserves is located in:
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high-risk areas
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This government commercialized the German Fischer-Tropsch process in order to obtain oil from coal through a catalyzed chemical reaction:
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South Africa.
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Instead of declining, this nonrenewable energy source, because of its lack of pollution and the rising price of oil, has seen significant growth:
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nuclear power.
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Although it pollutes heavily, this energy source is on the rise everywhere, especially in China
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coal
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This is the only industrialized country that has not ratified the Kyoto Protocol, a UN convention on climate change
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the United States
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This is the cleanest of the nonrenewable fuel sources, and it has become a substitute for oil as oil prices increase
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natural gas
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Wind power is sourced
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on land and sea
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According to the text, the fastest-growing renewable energy source is:
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solar PV
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This group of resources, which includes chrome and manganese, is used in many technology applications, and the United States imports many of these resources 100 percent:
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nonfuel minerals
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China’s vast and mountainous terrain leads to
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many languages and dialects
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Deserts and tropical forests seem opposites, but they have this trait in common:
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they separate markets, increasing transportation costs
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Porter in his diamond model distinguishes two types of factor conditions
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advanced and basic factors
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Rare earths are a group of elements used in:
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technology applications
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Which country controls the export market of rare earths
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China
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Why are rare earths a concern in industrialized economies
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Although they are relatively common, they do not occur in concentrated form often.
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Europe follows the precautionary principle approach to environmental health and safety. This means:
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manufacturers of new products need to prove the product is safe
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Sustainable business models:
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have as a goal to ensure that the marketplace exists for future generations
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Sustainable business models:
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have as a goal to ensure that the marketplace exists for future generations

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