Question 1

Which of the following assumptions was made in the original theories of absolute and comparative advantage?

Accepted Answer

A)  Specialized labor seeks efficiency. 
B)  Labor resources are fully employed. 
C)  Countries pursue objectives other than economic efficiency. 
D)  Production networks enable countries to concentrate on particular functions. 
A)  Specialized labor seeks efficiency. 
B)  Labor resources are fully employed. 
C)  Countries pursue objectives other than economic efficiency. 
D)  Production networks enable countries to concentrate on particular functions.

Question 2

All of the following are examples of international labor mobility EXCEPT ________.

Accepted Answer

A)  a manager assigned by an MNE to work short-term abroad 
B)  a refugee who takes up employment in another country 
C)  a college student on a study abroad program 
D)  an illegal immigrant working in another country 
A)  a manager assigned by an MNE to work short-term abroad 
B)  a refugee who takes up employment in another country 
C)  a college student on a study abroad program 
D)  an illegal immigrant working in another country

Question 3

Brain drain is a term that describes ________.

Accepted Answer

A)  a country's loss of educated, productive people 
B)  a nation's shift from an emerging market to a developed economy 
C)  the exportation of high-technology products in exchange for low-technology products 
D)  the unauthorized use of patents, copyrights, and technology by the counterfeiting industry 
A)  a country's loss of educated, productive people 
B)  a nation's shift from an emerging market to a developed economy 
C)  the exportation of high-technology products in exchange for low-technology products 
D)  the unauthorized use of patents, copyrights, and technology by the counterfeiting industry

Question 4

Under the theory of absolute advantage,countries hold two types of advantages-acquired advantages and technological advantages.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements is most likely FALSE?

Accepted Answer

A)  Developing countries trade mainly with developed countries. 
B)  Developed countries trade mainly with other developed countries. 
C)  Cultural similarity among countries enhances their trade with each other. 
D)  The greater the geographic distance between countries the greater the trade. 
A)  Developing countries trade mainly with developed countries. 
B)  Developed countries trade mainly with other developed countries. 
C)  Cultural similarity among countries enhances their trade with each other. 
D)  The greater the geographic distance between countries the greater the trade.

Question 6

A governmental strategic trade (industrial)policy is one that ________.

Accepted Answer

A)  lessens dependence on foreign military goods 
B)  seeks reciprocal free trade agreements between developed and developing countries 
C)  targets the resources needed to support industries that seem to fit best with the country's advantages 
D)  limits imports to encourage domestic production of what would otherwise be imported 
A)  lessens dependence on foreign military goods 
B)  seeks reciprocal free trade agreements between developed and developing countries 
C)  targets the resources needed to support industries that seem to fit best with the country's advantages 
D)  limits imports to encourage domestic production of what would otherwise be imported

Question 7

The finite nature of natural resources should work as a disadvantage for the export prices of developing countries.

Accepted Answer

A) True 
 B)False

Question 8

The factor proportions theory holds that countries should improve their competitiveness by importing capital and skilled employees from abroad.

Accepted Answer

A) True 
 B)False

Question 9

All of the following are types of products that are usually exceptions to what is predicted by the product life cycle theory EXCEPT ________.

Accepted Answer

A)  trendy clothing 
B)  luxury items 
C)  differentiated products 
D)  consumer durables 
A)  trendy clothing 
B)  luxury items 
C)  differentiated products 
D)  consumer durables

Question 10

Luxury products are the most likely types of products to behave according to the product life cycle theory of trade.

Accepted Answer

A) True 
 B)False

Question 11

All countries face the questions of what,how much,and with whom they should import and export. How they answer these questions primarily affects whether ________.

Accepted Answer

A)  nontradable goods become tradable 
B)  products go through a lengthy life cycle 
C)  companies adhere to laissez-faire export policies 
D)  a company's present production location will be competitive 
A)  nontradable goods become tradable 
B)  products go through a lengthy life cycle 
C)  companies adhere to laissez-faire export policies 
D)  a company's present production location will be competitive

Question 12

One way that developed countries specialize in order to gain acquired advantages is by ________.

Accepted Answer

A)  allocating research efforts more heavily in specific sectors 
B)  emphasizing production in natural resource endowments 
C)  restricting imports to those in the service sector 
D)  subsidizing the transport of exports 
A)  allocating research efforts more heavily in specific sectors 
B)  emphasizing production in natural resource endowments 
C)  restricting imports to those in the service sector 
D)  subsidizing the transport of exports

Question 13

A strategic trade policy is one that develops industries to lessen dependence on foreign military goods.

Accepted Answer

A) True 
 B)False

Question 14

The free trade theories of specialization primarily assume that ________.

Accepted Answer

A)  domestic resources are unable to move from the production of one good to another 
B)  countries have objectives other than economic efficiency 
C)  specialization triggers unemployment 
D)  resources are immobile internationally 
A)  domestic resources are unable to move from the production of one good to another 
B)  countries have objectives other than economic efficiency 
C)  specialization triggers unemployment 
D)  resources are immobile internationally

Question 15

Assume the following conditions: In the United States it takes 5 units of resources to produce a ton of potatoes and 10 to produce a ton of coal. In Canada it takes 6 units of resources to produce a ton of potatoes and 9 to produce a ton of coal. According to the theory of absolute advantage,________.

Accepted Answer

A)  the United States should export potatoes to Canada and import coal from Canada 
B)  the United States should export coal to Canada and import potatoes from Canada 
C)  the United States should import both potatoes and coal from Canada, while concentrating on production of more valuable goods 
D)  there would be no basis for trade 
A)  the United States should export potatoes to Canada and import coal from Canada 
B)  the United States should export coal to Canada and import potatoes from Canada 
C)  the United States should import both potatoes and coal from Canada, while concentrating on production of more valuable goods 
D)  there would be no basis for trade

Question 16

The international mobility of labor includes workers,students,tourists,and retirees who travel to another country.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following best supports a nation's decision to implement a strategic trade (industrial)policy?

Accepted Answer

A)  The policies have usually resulted in big payoffs. 
B)  Governments, rather than entrepreneurs, should take the risks of developing new industries. 
C)  Consumer needs would otherwise not be met. 
D)  Government actions should target industries that are believed to give the country its best export advantages. 
A)  The policies have usually resulted in big payoffs. 
B)  Governments, rather than entrepreneurs, should take the risks of developing new industries. 
C)  Consumer needs would otherwise not be met. 
D)  Government actions should target industries that are believed to give the country its best export advantages.

Question 18

All of the following are reasons that foreign investment may stimulate exports from the home (donor)country EXCEPT which of the following?

Accepted Answer

A)  The investor often sends home-country components to its facilities abroad. 
B)  The investor often sends home-country equipment to its facilities abroad. 
C)  Home-country aid usually goes where the investments are made. 
D)  The foreign facility is adept at selling the investors' home country products. 
A)  The investor often sends home-country components to its facilities abroad. 
B)  The investor often sends home-country equipment to its facilities abroad. 
C)  Home-country aid usually goes where the investments are made. 
D)  The foreign facility is adept at selling the investors' home country products.

Question 19

El Salvador has a population density of about 620 people per square mile and neighboring Honduras a population density of about 115 people per square mile. According to the factor proportions theory of trade,one would expect El Salvador's exports to Honduras to ________.

Accepted Answer

A)  have a lower labor-to-land ratio than its imports from Honduras 
B)  have a higher labor-to-land ratio than its imports from Honduras 
C)  embody more capital per square mile than its imports from Honduras 
D)  embody more capital per worker than its imports from Honduras 
A)  have a lower labor-to-land ratio than its imports from Honduras 
B)  have a higher labor-to-land ratio than its imports from Honduras 
C)  embody more capital per square mile than its imports from Honduras 
D)  embody more capital per worker than its imports from Honduras

Question 20

The existence of the four favorable conditions of the diamond of national advantage does not guarantee that an industry will develop in a given locale.

Accepted Answer

A) True 
 B)False

Which of the following assumptions was made in the original theories of absolute and comparative advantage?

All of the following are examples of international labor mobility EXCEPT ________.

Brain drain is a term that describes ________.

Under the theory of absolute advantage,countries hold two types of advantages-acquired advantages and technological advantages.

Which of the following statements is most likely FALSE?

A governmental strategic trade (industrial)policy is one that ________.

The finite nature of natural resources should work as a disadvantage for the export prices of developing countries.

The factor proportions theory holds that countries should improve their competitiveness by importing capital and skilled employees from abroad.

All of the following are types of products that are usually exceptions to what is predicted by the product life cycle theory EXCEPT ________.

Luxury products are the most likely types of products to behave according to the product life cycle theory of trade.

All countries face the questions of what,how much,and with whom they should import and export. How they answer these questions primarily affects whether ________.

One way that developed countries specialize in order to gain acquired advantages is by ________.

A strategic trade policy is one that develops industries to lessen dependence on foreign military goods.

The free trade theories of specialization primarily assume that ________.

The international mobility of labor includes workers,students,tourists,and retirees who travel to another country.

Which of the following best supports a nation's decision to implement a strategic trade (industrial)policy?

All of the following are reasons that foreign investment may stimulate exports from the home (donor)country EXCEPT which of the following?

El Salvador has a population density of about 620 people per square mile and neighboring Honduras a population density of about 115 people per square mile. According to the factor proportions theory of trade,one would expect El Salvador's exports to Honduras to ________.

The existence of the four favorable conditions of the diamond of national advantage does not guarantee that an industry will develop in a given locale.

Globalization and International Business

The Cultural Environments Facing Business

The Political and Legal Environments Facing Business

The Economic Environments Facing Businesses

Globalization and Society

Governmental Influence on Trade

Cross-National Cooperation and Agreements

Global Foreign-Exchange Markets

The Determination of Exchange Rates

The Strategy of International Business

Country Evaluation and Selection

Export and Import

Direct Investment and Collaborative Strategies

The Organization of International Business

Marketing Globally

Global Manufacturing and Supply Chain Management

International Accounting Issues

The Multinational Finance Function

International Human Resources

Filters

Exam 6: International Trade and Factor Mobility Theory

Which of the following assumptions was made in the original theories of absolute and comparative advantage?

All of the following are examples of international labor mobility EXCEPT ________.

Brain drain is a term that describes ________.

Under the theory of absolute advantage,countries hold two types of advantages-acquired advantages and technological advantages.

Which of the following statements is most likely FALSE?

A governmental strategic trade (industrial)policy is one that ________.

The finite nature of natural resources should work as a disadvantage for the export prices of developing countries.

The factor proportions theory holds that countries should improve their competitiveness by importing capital and skilled employees from abroad.

All of the following are types of products that are usually exceptions to what is predicted by the product life cycle theory EXCEPT ________.

Luxury products are the most likely types of products to behave according to the product life cycle theory of trade.

All countries face the questions of what,how much,and with whom they should import and export. How they answer these questions primarily affects whether ________.

One way that developed countries specialize in order to gain acquired advantages is by ________.

A strategic trade policy is one that develops industries to lessen dependence on foreign military goods.

The free trade theories of specialization primarily assume that ________.

The international mobility of labor includes workers,students,tourists,and retirees who travel to another country.

Which of the following best supports a nation's decision to implement a strategic trade (industrial)policy?

All of the following are reasons that foreign investment may stimulate exports from the home (donor)country EXCEPT which of the following?

El Salvador has a population density of about 620 people per square mile and neighboring Honduras a population density of about 115 people per square mile. According to the factor proportions theory of trade,one would expect El Salvador's exports to Honduras to ________.

The existence of the four favorable conditions of the diamond of national advantage does not guarantee that an industry will develop in a given locale.

Globalization and International Business

The Cultural Environments Facing Business

The Political and Legal Environments Facing Business

The Economic Environments Facing Businesses

Globalization and Society

Governmental Influence on Trade

Cross-National Cooperation and Agreements

Global Foreign-Exchange Markets

The Determination of Exchange Rates

The Strategy of International Business

Country Evaluation and Selection

Export and Import

Direct Investment and Collaborative Strategies

The Organization of International Business

Marketing Globally

Global Manufacturing and Supply Chain Management

International Accounting Issues

The Multinational Finance Function

International Human Resources

Filters