1. How does domestic business differ from an international business?

Domestic business are businesses that conducts its affairs in its local or home country.
These are the businesses that runs economic transactions inside its geographical boundaries
and are limited to territory. On the other hand, International business are the ones where
economic transactions are conducted on different and several countries across borders. In
international business, buyer and seller doesn’t belong to the same country while in the
domestic business says otherwise
2. What cultural factors affect international business activities?
Cultural factors that affect international business activities are language, education,
religion, values, customs, and social relationships. These factors affect international
businesses in the way they function. Where decisions are based off before they are made. It
extensively affects the analysis of the business in terms of sales and distribution and most
importantly in strategic planning.
3. What is the basic economic problem?
Scarcity is the basic economic. It simply means the gap between the limited resources
and theoretically unlimited wants. This requires good decision making in budgeting in order
to satisfy the needs and wants.
4. What factors affect the supply of a good or service?
Supply of goods and services are affected by the demand. If a good or service is high
on demand, most likely, manufacturers and laborers will produce more. But if the resources
are limited because of factors such as price, weather conditions, and availability, people will
tend to create alternatives to supply the needs.
5. What are the three characteristics of capitalism?
Capitalism is characterized by private ownership by means of production. Capitalism
is also by means of Private property rights which gives the owner incentive to maximize the
value of their property. Capitalism also developed industrialization which gave way to the
large-scale availability of mass-market consumer goods.
6. What are the main influences on a country's economic development?
Economists states that the main influences on a country’s economic development are
human resources, physical capital, natural resources, and technology. We may observe that
these factors in first world countries and developing countries are the ones they are focused
and continuously working on. These factors are interrelated with each other and affects every
movement of the economy.
7. What is the difference between absolute advantage and comparative advantage?
Absolute advantage is the direct ability to produce more and better goods and
services more than its competitors or anyone else. While comparative advantage simply
means producing goods and services at a lower opportunity cost and not necessarily
producing in a high volume or quality.