Question 1

Many products' location of production will shift internationally as the products go through their life cycle.

Accepted Answer

A) True 
 B)False

Question 2

Countries with varied climates and varied natural resources generally ________ than countries with less varied climates and natural resources.

Accepted Answer

A) have lower per capita incomes 
B) depend less heavily on trade 
C) have more ethnic subgroups 
D) have higher endowments of capital relative to labor 
A) have lower per capita incomes 
B) depend less heavily on trade 
C) have more ethnic subgroups 
D) have higher endowments of capital relative to labor

Question 3

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 4

The term brain drain describes the export of high-technology products in exchange for low-technology products.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements most likely undermines the arguments for a strategic trade policy?

Accepted Answer

A) Entrepreneurs, rather than governments, should take business risks. 
B) Developed countries have production lead time over developing countries. 
C) If big companies can figure out what products to develop, so can governments. 
D) Governments have limited resources, so industries with greater growth potential should be targeted. 
A) Entrepreneurs, rather than governments, should take business risks. 
B) Developed countries have production lead time over developing countries. 
C) If big companies can figure out what products to develop, so can governments. 
D) Governments have limited resources, so industries with greater growth potential should be targeted.

Question 6

The comparative advantage theory holds that a country will gain from trade ________.

Accepted Answer

A) when it exports products for which it has an acquired advantage and imports products for which another country has a natural advantage 
B) if it exports goods it can produce more efficiently than other countries and imports goods other countries can produce more efficiently than it can 
C) even though it can produce all goods more efficiently than other countries 
D) if it exports products using its abundant production factors in exchange for products for which it has scarce production factors 
A) when it exports products for which it has an acquired advantage and imports products for which another country has a natural advantage 
B) if it exports goods it can produce more efficiently than other countries and imports goods other countries can produce more efficiently than it can 
C) even though it can produce all goods more efficiently than other countries 
D) if it exports products using its abundant production factors in exchange for products for which it has scarce production factors

Question 7

The diamond of national advantage would be best used to answer which of the following questions?

Accepted Answer

A) How do developed countries prevent the trade of blood diamonds? 
B) How can developing countries create a significant trade surplus? 
C) Why do specialized competitive advantages differ among countries? 
D) Why do most innovative products originate in developed countries? 
A) How do developed countries prevent the trade of blood diamonds? 
B) How can developing countries create a significant trade surplus? 
C) Why do specialized competitive advantages differ among countries? 
D) Why do most innovative products originate in developed countries?

Question 8

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 9

Labor and capital mobility are intertwined because ________.

Accepted Answer

A) illegal workers sometimes pay large sums to people who smuggle them into another country 
B) people cannot emigrate to another country unless they bring capital with them 
C) companies receive tax benefits for hiring immigrants 
D) immigrants bring an investment in human capital with them 
A) illegal workers sometimes pay large sums to people who smuggle them into another country 
B) people cannot emigrate to another country unless they bring capital with them 
C) companies receive tax benefits for hiring immigrants 
D) immigrants bring an investment in human capital with them

Question 10

Nontradable goods are BEST defined as ________.

Accepted Answer

A) products and services for which exporting costs are excessive 
B) factors of production that exceed safety regulations 
C) goods used for national defense 
D) products that comprise a portion of the inputs for finished products 
A) products and services for which exporting costs are excessive 
B) factors of production that exceed safety regulations 
C) goods used for national defense 
D) products that comprise a portion of the inputs for finished products

Question 11

Which of the following is NOT one of the reasons that foreign investment may stimulate exports from the home (donor)country?

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 12

The comparative advantage theory holds that a country will gain from trade even though it can produce all goods more efficiently than other countries.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

As a leading exporter of luxury automobiles, Germany has built a strong reputation in engineering.Germany's trade most likely relies on a(n)________.

Accepted Answer

A) outward immigration restriction 
B) natural advantage 
C) acquired advantage 
D) neomercantilist policy 
A) outward immigration restriction 
B) natural advantage 
C) acquired advantage 
D) neomercantilist policy

Question 15

According to Adam Smith's theory of absolute advantage, specialization allows countries to increase their efficiency for each of the following reasons EXCEPT ________.

Accepted Answer

A) labor could become more skilled by repeating the same tasks 
B) transportation costs could be lowered by producing closer to markets 
C) labor would not lose time in switching from the production of one kind of product to another 
D) higher production would provide incentives for the development of more effective working methods 
A) labor could become more skilled by repeating the same tasks 
B) transportation costs could be lowered by producing closer to markets 
C) labor would not lose time in switching from the production of one kind of product to another 
D) higher production would provide incentives for the development of more effective working methods

Question 16

The free trade theories of specialization primarily assume that ________.

Accepted Answer

A) specialization leads to unemployment, but production gains compensate for job losses 
B) resources can move internationally from the production of one good to another 
C) resources can move domestically from the production of one good to another 
D) countries have objectives other than economic efficiency 
A) specialization leads to unemployment, but production gains compensate for job losses 
B) resources can move internationally from the production of one good to another 
C) resources can move domestically from the production of one good to another 
D) countries have objectives other than economic efficiency

Question 17

The theory of absolute advantage holds that there are advantages to trade because different countries can produce different goods more efficiently than others.

Accepted Answer

A) True 
 B)False

Question 18

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 19

What is the difference between the free trade theories of absolute advantage and comparative advantage? How can free trade improve global efficiency?

Accepted Answer

Absolute advantage holds that different

Question 20

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

Many products' location of production will shift internationally as the products go through their life cycle.

Countries with varied climates and varied natural resources generally ________ than countries with less varied climates and natural resources.

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

The term brain drain describes the export of high-technology products in exchange for low-technology products.

Which of the following statements most likely undermines the arguments for a strategic trade policy?

The comparative advantage theory holds that a country will gain from trade ________.

The diamond of national advantage would be best used to answer which of the following questions?

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

Labor and capital mobility are intertwined because ________.

Nontradable goods are BEST defined as ________.

Which of the following is NOT one of the reasons that foreign investment may stimulate exports from the home (donor)country?

The comparative advantage theory holds that a country will gain from trade even though it can produce all goods more efficiently than other countries.

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

As a leading exporter of luxury automobiles, Germany has built a strong reputation in engineering.Germany's trade most likely relies on a(n)________.

According to Adam Smith's theory of absolute advantage, specialization allows countries to increase their efficiency for each of the following reasons EXCEPT ________.

The free trade theories of specialization primarily assume that ________.

The theory of absolute advantage holds that there are advantages to trade because different countries can produce different goods more efficiently than others.

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

What is the difference between the free trade theories of absolute advantage and comparative advantage? How can free trade improve global efficiency?

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

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

Many products' location of production will shift internationally as the products go through their life cycle.

Countries with varied climates and varied natural resources generally ________ than countries with less varied climates and natural resources.

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

The term brain drain describes the export of high-technology products in exchange for low-technology products.

Which of the following statements most likely undermines the arguments for a strategic trade policy?

The comparative advantage theory holds that a country will gain from trade ________.

The diamond of national advantage would be best used to answer which of the following questions?

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

Labor and capital mobility are intertwined because ________.

Nontradable goods are BEST defined as ________.

Which of the following is NOT one of the reasons that foreign investment may stimulate exports from the home (donor)country?

The comparative advantage theory holds that a country will gain from trade even though it can produce all goods more efficiently than other countries.

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

As a leading exporter of luxury automobiles, Germany has built a strong reputation in engineering.Germany's trade most likely relies on a(n)________.

According to Adam Smith's theory of absolute advantage, specialization allows countries to increase their efficiency for each of the following reasons EXCEPT ________.

The free trade theories of specialization primarily assume that ________.

The theory of absolute advantage holds that there are advantages to trade because different countries can produce different goods more efficiently than others.

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

What is the difference between the free trade theories of absolute advantage and comparative advantage? How can free trade improve global efficiency?

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

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