Which of the Following Statements Is True of Business Services

question 18

Multiple Choice

Which of the following statements is true of business services?

• A) Most business services companies enter international markets to service their local clients abroad.
• B) Services are intangible and so cannot be produced in one country and exported to another.
• C) The removal of trade barriers poses a serious threat to the continued expansion of international services trade.
• D) Firms should avoid providing after-sales services as the costs do not justify the benefits.
• E) The perception of quality of a business service depends solely on the average per capita income of the buyer's country.

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Definitions:

Explicit Cost

Direct, out-of-pocket payments for goods or services that a company incurs in the course of doing business.

Economic Profit

The difference between the total revenue received by a firm and the total cost of all resources used, including opportunity costs.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision. It represents the benefits an individual, investor or business misses out on when choosing one alternative over another.

Implicit Rate

The implied rate of return that is not explicitly stated, often used in the context of comparing the cost of borrowing to the rate of return on investments.