Question 1

The inability of a company to gain foreign production factors to use in its domestic operations most likely ________.

Accepted Answer

A) entices the company to export its own production factors 
B) stimulates the company to adopt efficient substitute methods of production 
C) stimulates foreign companies to invest in that domestic market 
D) causes the company's products to move more rapidly through their life cycles 
A) entices the company to export its own production factors 
B) stimulates the company to adopt efficient substitute methods of production 
C) stimulates foreign companies to invest in that domestic market 
D) causes the company's products to move more rapidly through their life cycles B

Question 2

In a short essay, discuss the theory of mercantilism, and discuss favorable and unfavorable balances of trade as they apply to international business.

Accepted Answer

Mercantilism holds that a country's wealth is measured by its holdings of treasure, which usually meant gold.According to the theory, countries should export more than they import and, if successful, receive gold from countries that run deficits.To export more than they imported, governments imposed restrictions on most imports and subsidized production of many products that could otherwise not compete in domestic or export markets.
A favorable balance of trade indicates that a country is exporting more than it is importing.An unfavorable balance of trade indicates that a country is importing more than it is exporting, which is known as a deficit.However, it is not necessarily beneficial to run a trade surplus nor is it necessarily disadvantageous to run a trade deficit.A country that is running a surplus, or favorable balance of trade, is, for the time being, importing goods and services of less value than those it is exporting.In effect, the surplus country is granting credit to the deficit country.If that credit cannot eventually buy sufficient goods and services, the so-called favorable trade balance actually may turn out to be disadvantageous for the country with the surplus.

Question 3

Tests to substantiate the factor proportions theory have had mixed results most likely because ________.

Accepted Answer

A) labor migration quickly outdates any studies 
B) most countries have a favorable balance of trade 
C) labor skills and education are not homogeneous 
D) large and small countries have different trade policies 
A) labor migration quickly outdates any studies 
B) most countries have a favorable balance of trade 
C) labor skills and education are not homogeneous 
D) large and small countries have different trade policies C

Question 4

The free trade theories of specialization assume that countries will be better off even though some people are unemployed.

Accepted Answer

A) True 
 B)False

Question 5

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 6

Factor mobility refers to the movement of which of the following combinations?

Accepted Answer

A) capital, technology and people 
B) currency, profits and raw materials 
C) labor, capital and management 
D) trade, profits and materials 
A) capital, technology and people 
B) currency, profits and raw materials 
C) labor, capital and management 
D) trade, profits and materials

Question 7

Between now and 2050, countries undergoing a simultaneous population reduction and an increased percentage of retirees in the population most likely will need more ________.

Accepted Answer

A) imports 
B) immigrants 
C) domestic products 
D) favorable balances of trade 
A) imports 
B) immigrants 
C) domestic products 
D) favorable balances of trade

Question 8

According to the diamond of national advantage theory, the domestic existence of all four conditions best explains ________.

Accepted Answer

A) the essence of an industry's development 
B) the position of a product in its life cycle 
C) where globally competitive firms develop and sustain themselves 
D) why countries rely on abundant factor endowments 
A) the essence of an industry's development 
B) the position of a product in its life cycle 
C) where globally competitive firms develop and sustain themselves 
D) why countries rely on abundant factor endowments

Question 9

According to the PLC theory, at an early stage of a product's life cycle the product is likely to be made in a more ________ method than in its later stages.

Accepted Answer

A) capital-intensive 
B) labor-intensive 
C) land-intensive 
D) low-cost 
A) capital-intensive 
B) labor-intensive 
C) land-intensive 
D) low-cost

Question 10

From an economic standpoint, why do production factors move from one country to another? How does factor movement affect international trade?

Accepted Answer

Capital, especially short-term capital,

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Research shows that urbanization leads to higher productivity.Which of the following is the LEAST likely reason for this?

Accepted Answer

A) Urbanization establishes an inflow of immigrants who will work for less money. 
B) In urban areas, firms can more easily find people with the exact skills they need. 
C) Urbanization allows for economies in moving supplies and finished products. 
D) In urban areas, knowledge flows more easily from one company to another and from one industry to another. 
A) Urbanization establishes an inflow of immigrants who will work for less money. 
B) In urban areas, firms can more easily find people with the exact skills they need. 
C) Urbanization allows for economies in moving supplies and finished products. 
D) In urban areas, knowledge flows more easily from one company to another and from one industry to another.

Question 13

According to the PLC theory, developing countries have their best production advantage in which stage of the product life cycle?

Accepted Answer

A) growth 
B) maturity 
C) decline 
D) introduction 
A) growth 
B) maturity 
C) decline 
D) introduction

Question 14

Costa Rica's recent economic transformation to depend more on high-tech manufacturing is largely due to its adoption of ________ trade policy.

Accepted Answer

A) an import substitution 
B) a comparative advantage 
C) a factor proportions 
D) a strategic 
A) an import substitution 
B) a comparative advantage 
C) a factor proportions 
D) a strategic

Question 15

Understanding trade theories helps companies know if they will need to compete against goods and services produced abroad.

Accepted Answer

A) True 
 B)False

Question 16

The growth of small-scale production technology will most likely enable small countries to produce products efficiently for their own consumption.

Accepted Answer

A) True 
 B)False

Question 17

All of the following are features of the diamond of national advantage theory EXCEPT ________.

Accepted Answer

A) firm strategy, structure, and rivalry 
B) strategic trade policy regulations 
C) related and supporting industries 
D) demand conditions 
A) firm strategy, structure, and rivalry 
B) strategic trade policy regulations 
C) related and supporting industries 
D) demand conditions

Question 18

The four favorable domestic conditions of the diamond of national advantage help to explain how and where globally competitive companies develop and sustain themselves.

Accepted Answer

A) True 
 B)False

Question 19

Countries with large land areas are generally less dependent on trade than countries with small land areas because of ________.

Accepted Answer

A) highly restricted economic scales 
B) self-sufficiency with natural resources 
C) higher transportation costs related to foreign trade 
D) the development of unique products that have a limited demand 
A) highly restricted economic scales 
B) self-sufficiency with natural resources 
C) higher transportation costs related to foreign trade 
D) the development of unique products that have a limited demand

Question 20

An exception to the PLC theory in terms of production location is often a product with very rapid change in innovation.

Accepted Answer

A) True 
 B)False

The inability of a company to gain foreign production factors to use in its domestic operations most likely ________.

In a short essay, discuss the theory of mercantilism, and discuss favorable and unfavorable balances of trade as they apply to international business.

Tests to substantiate the factor proportions theory have had mixed results most likely because ________.

The free trade theories of specialization assume that countries will be better off even though some people are unemployed.

Factor mobility refers to the movement of which of the following combinations?

Between now and 2050, countries undergoing a simultaneous population reduction and an increased percentage of retirees in the population most likely will need more ________.

According to the diamond of national advantage theory, the domestic existence of all four conditions best explains ________.

According to the PLC theory, at an early stage of a product's life cycle the product is likely to be made in a more ________ method than in its later stages.

From an economic standpoint, why do production factors move from one country to another? How does factor movement affect international trade?

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

Research shows that urbanization leads to higher productivity.Which of the following is the LEAST likely reason for this?

According to the PLC theory, developing countries have their best production advantage in which stage of the product life cycle?

Costa Rica's recent economic transformation to depend more on high-tech manufacturing is largely due to its adoption of ________ trade policy.

Understanding trade theories helps companies know if they will need to compete against goods and services produced abroad.

The growth of small-scale production technology will most likely enable small countries to produce products efficiently for their own consumption.

All of the following are features of the diamond of national advantage theory EXCEPT ________.

The four favorable domestic conditions of the diamond of national advantage help to explain how and where globally competitive companies develop and sustain themselves.

Countries with large land areas are generally less dependent on trade than countries with small land areas because of ________.

An exception to the PLC theory in terms of production location is often a product with very rapid change in innovation.

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

Global Capital Markets

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 and Finance Issues

International Human Resource Management

Filters

Exam 6: International Trade and Factor-Mobility Theory

The inability of a company to gain foreign production factors to use in its domestic operations most likely ________.

In a short essay, discuss the theory of mercantilism, and discuss favorable and unfavorable balances of trade as they apply to international business.

Tests to substantiate the factor proportions theory have had mixed results most likely because ________.

The free trade theories of specialization assume that countries will be better off even though some people are unemployed.

Factor mobility refers to the movement of which of the following combinations?

Between now and 2050, countries undergoing a simultaneous population reduction and an increased percentage of retirees in the population most likely will need more ________.

According to the diamond of national advantage theory, the domestic existence of all four conditions best explains ________.

According to the PLC theory, at an early stage of a product's life cycle the product is likely to be made in a more ________ method than in its later stages.

From an economic standpoint, why do production factors move from one country to another? How does factor movement affect international trade?

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

Research shows that urbanization leads to higher productivity.Which of the following is the LEAST likely reason for this?

According to the PLC theory, developing countries have their best production advantage in which stage of the product life cycle?

Costa Rica's recent economic transformation to depend more on high-tech manufacturing is largely due to its adoption of ________ trade policy.

Understanding trade theories helps companies know if they will need to compete against goods and services produced abroad.

The growth of small-scale production technology will most likely enable small countries to produce products efficiently for their own consumption.

All of the following are features of the diamond of national advantage theory EXCEPT ________.

The four favorable domestic conditions of the diamond of national advantage help to explain how and where globally competitive companies develop and sustain themselves.

Countries with large land areas are generally less dependent on trade than countries with small land areas because of ________.

An exception to the PLC theory in terms of production location is often a product with very rapid change in innovation.

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

Global Capital Markets

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 and Finance Issues

International Human Resource Management

Filters