Question 1

Mercantilism views competition for the world's wealth as a positive-sum game.

Accepted Answer

A) True 
 B)False

Question 2

Which theory suggests that a country should produce and export those goods and services for which it is relatively more productive than other countries and import those goods and services for which other countries are relatively more productive?

Accepted Answer

A)  relative advantage 
B)  comparative advantage 
C)  absolute advantage 
D)  specialization of countries 
A)  relative advantage 
B)  comparative advantage 
C)  absolute advantage 
D)  specialization of countries

Question 3

The theory of absolute advantage measures a nation's wealth by the standard of living of its people.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is an assumption made by the comparative advantage theory?

Accepted Answer

A)  maximization of production and consumption 
B)  government interference and control in trade activities 
C)  creation of trade deficits 
D)  creation of trade surpluses 
A)  maximization of production and consumption 
B)  government interference and control in trade activities 
C)  creation of trade deficits 
D)  creation of trade surpluses

Question 5

During which stage of the international product life cycle theory does demand rise and remain sustained for a fairly lengthy period of time?

Accepted Answer

A)  product decline stage 
B)  new product stage 
C)  maturing product stage 
D)  standardized product stage 
A)  product decline stage 
B)  new product stage 
C)  maturing product stage 
D)  standardized product stage

Question 6

Both absolute and comparative advantage theories assume that ________ is the only resource used in the production process.

Accepted Answer

A)  land 
B)  labor 
C)  capital 
D)  equipment 
A)  land 
B)  labor 
C)  capital 
D)  equipment

Question 7

Which theory listed below is also called the Heckscher-Ohlin theory?

Accepted Answer

A)  relative advantage 
B)  comparative advantage 
C)  factor proportions theory 
D)  specialization of countries 
A)  relative advantage 
B)  comparative advantage 
C)  factor proportions theory 
D)  specialization of countries

Question 8

Mercantilist countries used to amass wealth by acquiring less-developed territories around the world.

Accepted Answer

A) True 
 B)False

Question 9

The new trade theory is mainly at odds with the ________ theory.

Accepted Answer

A)  international product life cycle 
B)  comparative advantage 
C)  national competitive advantage 
D)  factor proportions 
A)  international product life cycle 
B)  comparative advantage 
C)  national competitive advantage 
D)  factor proportions

Question 10

The theory of absolute advantage measures a nation's wealth by determining the ________.

Accepted Answer

A)  amount of gold it has on reserve 
B)  quantity of minerals it has on reserve 
C)  total trade volume in the country 
D)  living standards of its people 
A)  amount of gold it has on reserve 
B)  quantity of minerals it has on reserve 
C)  total trade volume in the country 
D)  living standards of its people

Question 11

Explain the factor proportions theory and discuss why it is at odds with the new trade theory.

Accepted Answer

In the early 1900s,an international trad

Question 12

Which of the following is true about the theory of absolute advantage?

Accepted Answer

A)  The theory accepts the mercantilist idea that international trade is a zero-sum game. 
B)  The theory approves the objective of national governments to acquire wealth through restrictive trade policies. 
C)  The theory emphasizes that nations should open their doors to trade so that people can obtain more goods at cheaper rates. 
D)  The theory measures a nation's wealth by how much gold and silver it has on reserve. 
A)  The theory accepts the mercantilist idea that international trade is a zero-sum game. 
B)  The theory approves the objective of national governments to acquire wealth through restrictive trade policies. 
C)  The theory emphasizes that nations should open their doors to trade so that people can obtain more goods at cheaper rates. 
D)  The theory measures a nation's wealth by how much gold and silver it has on reserve.

Question 13

Which of the following statements is incorrect with regard to the importance of colonies for mercantilist nations?

Accepted Answer

A)  They served as sources of inexpensive raw materials. 
B)  They served as markets for higher-priced finished goods. 
C)  They served as a source of military protection. 
D)  They served as a source of profits for mercantilist powers. 
A)  They served as sources of inexpensive raw materials. 
B)  They served as markets for higher-priced finished goods. 
C)  They served as a source of military protection. 
D)  They served as a source of profits for mercantilist powers.

Question 14

Scenario: Better Mousetrap Inc.
Better Mousetrap Inc. is a manufacturing company that sells pest control products. Recently the company launched an innovative mousetrap with a unique design that has been selling well in the U.S. market. Senior Vice President Marc Wallace, even recommended expanding sales overseas in order to increase company revenues.
-Jack has always handled product returns on a case-by-case basis,but he is often unprepared to deal with too many cases of returns.Which of the following would most likely help Jack increase his repeat business?

Accepted Answer

A)  continuing with the current system, since it is already well-established 
B)  accepting returns but crediting customer accounts slowly to discourage future returns 
C)  planning for returns and giving prompt credits to customers 
D)  avoiding receiving returns when possible to discourage the loss of revenue 
A)  continuing with the current system, since it is already well-established 
B)  accepting returns but crediting customer accounts slowly to discourage future returns 
C)  planning for returns and giving prompt credits to customers 
D)  avoiding receiving returns when possible to discourage the loss of revenue

Question 15

Most of the world merchandise trade is composed of trade in ________.

Accepted Answer

A)  minerals 
B)  services 
C)  manufactured goods 
D)  agricultural products 
A)  minerals 
B)  services 
C)  manufactured goods 
D)  agricultural products

Question 16

________ says that nations should accumulate financial wealth,usually in the form of gold,by encouraging exports and discouraging imports.

Accepted Answer

A)  Absolute advantage theory 
B)  Factor proportions theory 
C)  Mercantilism 
D)  Communism 
A)  Absolute advantage theory 
B)  Factor proportions theory 
C)  Mercantilism 
D)  Communism

Question 17

The term ________ refers to the voluntary exchange of goods,services,assets,or money between one person or organization and another across national borders.

Accepted Answer

A)  sales 
B)  transaction 
C)  international trade 
D)  strategic management 
A)  sales 
B)  transaction 
C)  international trade 
D)  strategic management

Question 18

The theory of absolute advantage destroys the mercantilist idea that international trade is a ________.

Accepted Answer

A)  positive-sum game 
B)  zero-sum game 
C)  negative-sum game 
D)  win-win game 
A)  positive-sum game 
B)  zero-sum game 
C)  negative-sum game 
D)  win-win game

Question 19

According to Adam Smith,international trade should not be restricted by tariffs and quotas in order to give a country an absolute advantage.

Accepted Answer

A) True 
 B)False

Question 20

Scenario: Better Mousetrap Inc.
Better Mousetrap Inc. is a manufacturing company that sells pest control products. Recently the company launched an innovative mousetrap with a unique design that has been selling well in the U.S. market. Senior Vice President Marc Wallace, even recommended expanding sales overseas in order to increase company revenues.
-Eventually,Wallace expects that domestic production of the mousetrap will cease altogether.This would happen in the ________ stage of the product life cycle.

Accepted Answer

A)  new product 
B)  maturing product 
C)  adapted product 
D)  standardized product 
A)  new product 
B)  maturing product 
C)  adapted product 
D)  standardized product

Mercantilism views competition for the world's wealth as a positive-sum game.

Which theory suggests that a country should produce and export those goods and services for which it is relatively more productive than other countries and import those goods and services for which other countries are relatively more productive?

The theory of absolute advantage measures a nation's wealth by the standard of living of its people.

Which of the following is an assumption made by the comparative advantage theory?

During which stage of the international product life cycle theory does demand rise and remain sustained for a fairly lengthy period of time?

Both absolute and comparative advantage theories assume that ________ is the only resource used in the production process.

Which theory listed below is also called the Heckscher-Ohlin theory?

Mercantilist countries used to amass wealth by acquiring less-developed territories around the world.

The new trade theory is mainly at odds with the ________ theory.

The theory of absolute advantage measures a nation's wealth by determining the ________.

Explain the factor proportions theory and discuss why it is at odds with the new trade theory.

Which of the following is true about the theory of absolute advantage?

Which of the following statements is incorrect with regard to the importance of colonies for mercantilist nations?

Most of the world merchandise trade is composed of trade in ________.

________ says that nations should accumulate financial wealth,usually in the form of gold,by encouraging exports and discouraging imports.

The term ________ refers to the voluntary exchange of goods,services,assets,or money between one person or organization and another across national borders.

The theory of absolute advantage destroys the mercantilist idea that international trade is a ________.

According to Adam Smith,international trade should not be restricted by tariffs and quotas in order to give a country an absolute advantage.

Globalization

Cross-Cultural Business

Political Economy and Ethics

Economic Development of Nations

Political Economy of Trade

Foreign Direct Investment

Regional Economic Integration

International Financial Markets

International Monetary System

International Strategy and Organization

Analyzing International Opportunities

Selecting and Managing Entry Modes

Developing and Marketing Products

Managing International Operations

Hiring and Managing Employees

Filters

Exam 5: International Trade Theory

Mercantilism views competition for the world's wealth as a positive-sum game.

Which theory suggests that a country should produce and export those goods and services for which it is relatively more productive than other countries and import those goods and services for which other countries are relatively more productive?

The theory of absolute advantage measures a nation's wealth by the standard of living of its people.

Which of the following is an assumption made by the comparative advantage theory?

During which stage of the international product life cycle theory does demand rise and remain sustained for a fairly lengthy period of time?

Both absolute and comparative advantage theories assume that ________ is the only resource used in the production process.

Which theory listed below is also called the Heckscher-Ohlin theory?

Mercantilist countries used to amass wealth by acquiring less-developed territories around the world.

The new trade theory is mainly at odds with the ________ theory.

The theory of absolute advantage measures a nation's wealth by determining the ________.

Explain the factor proportions theory and discuss why it is at odds with the new trade theory.

Which of the following is true about the theory of absolute advantage?

Which of the following statements is incorrect with regard to the importance of colonies for mercantilist nations?

Most of the world merchandise trade is composed of trade in ________.

________ says that nations should accumulate financial wealth,usually in the form of gold,by encouraging exports and discouraging imports.

The term ________ refers to the voluntary exchange of goods,services,assets,or money between one person or organization and another across national borders.

The theory of absolute advantage destroys the mercantilist idea that international trade is a ________.

According to Adam Smith,international trade should not be restricted by tariffs and quotas in order to give a country an absolute advantage.

Globalization

Cross-Cultural Business

Political Economy and Ethics

Economic Development of Nations

Political Economy of Trade

Foreign Direct Investment

Regional Economic Integration

International Financial Markets

International Monetary System

International Strategy and Organization

Analyzing International Opportunities

Selecting and Managing Entry Modes

Developing and Marketing Products

Managing International Operations

Hiring and Managing Employees

Filters