A Foreign Company, Partially Owned by That Foreign Government, Manufactures

question 32

Multiple Choice

A foreign company, partially owned by that foreign government, manufactures televisions in the foreign country.The cost to the company for the manufacture of the product is the equivalent of $60 in the U.S.Because of excess production, the firm exports 50,000 sets to the United States where they are sold for $75 each.If the nearest rival U.S.-made set sells for $85, the action of the foreign company:

• A)constitutes price-fixing.
• B)violates the WTO's antidumping provisions.
• C)violates the Sherman Act, because of the involvement of the foreign government in the company.
• D)appears to be legal.

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Definitions:

Population

The entire group of individuals or instances about whom the data is to be collected or researched.

Significance Level

The probability of rejecting the null hypothesis in a statistical test when it is actually true, often denoted by alpha.

Type I Error

The error that occurs when a true null hypothesis is incorrectly rejected, often denoted as the false positive rate.

Type II Error

A Type II error occurs when a statistical test fails to reject a false null hypothesis, indicating a false negative result.