Question 1

The measures of a nation's well-being other than the financial wealth accumulated through exports are irrelevant according to ________.

Accepted Answer

A)  mercantilism 
B)  absolute advantage theory 
C)  factor proportions theory 
D)  new trade theory 
A)  mercantilism 
B)  absolute advantage theory 
C)  factor proportions theory 
D)  new trade theory

Question 2

During which of the following stages of the international product life cycle theory does high purchasing power and buyer demand in an industrialized nation encourage a company to design and introduce a product concept?

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 3

Country A produces a ton of coffee using one unit of resources.Country B produces two tons of coffee using one unit of resources.Which of the following is true regarding Country A and Country B?

Accepted Answer

A)  Country A has an absolute advantage in producing coffee. 
B)  Country B has an absolute advantage in producing coffee. 
C)  Neither Country A nor Country B has an absolute advantage in producing coffee. 
D)  Both Country A and Country B have an absolute advantage in producing coffee. 
A)  Country A has an absolute advantage in producing coffee. 
B)  Country B has an absolute advantage in producing coffee. 
C)  Neither Country A nor Country B has an absolute advantage in producing coffee. 
D)  Both Country A and Country B have an absolute advantage in producing coffee.

Question 4

Trade in services tends to be relatively more important for the world's richest countries.

Accepted Answer

A) True 
 B)False

Question 5

The ________ theory states that countries produce and export goods that require resources available in abundance and import goods that require resources in short supply.

Accepted Answer

A)  new trade 
B)  absolute advantage 
C)  international product life cycle 
D)  factor proportions 
A)  new trade 
B)  absolute advantage 
C)  international product life cycle 
D)  factor proportions

Question 6

Trade between most nations is presently characterized by a certain degree of isolationism.

Accepted Answer

A) True 
 B)False

Question 7

The ability of a nation to produce a good more efficiently than any other nation is called its absolute advantage.

Accepted Answer

A) True 
 B)False

Question 8

Explain mercantilism.What were its major flaws?

Accepted Answer

The trade theory that nations should acc

Question 9

The theories of comparative advantage and absolute advantage assume that countries are driven only by the maximization of production and consumption.

Accepted Answer

A) True 
 B)False

Question 10

Economist David Ricardo developed the theory of comparative advantage.

Accepted Answer

A) True 
 B)False

Question 11

Factor proportions theory states that factors in great supply relative to demand will be more costly than factors in short supply relative to demand.

Accepted Answer

A) True 
 B)False

Question 12

Factor proportions theory differs from the theory of comparative advantage in that the focus of factor proportions theory is on the ________.

Accepted Answer

A)  usage of the most abundant factors of production, while the focus of the comparative advantage theory is on the productivity of the production process 
B)  accumulation of financial wealth in the form of gold by encouraging imports and discouraging exports, while the comparative advantage theory focuses on usage of the most abundant factors of production 
C)  productivity of the production process, while the comparative advantage theory focuses on maximization of production and consumption 
D)  minimization of trade surpluses, whereas the comparative advantage theory focuses on the mercantilist idea that international trade is a zero-sum game 
A)  usage of the most abundant factors of production, while the focus of the comparative advantage theory is on the productivity of the production process 
B)  accumulation of financial wealth in the form of gold by encouraging imports and discouraging exports, while the comparative advantage theory focuses on usage of the most abundant factors of production 
C)  productivity of the production process, while the comparative advantage theory focuses on maximization of production and consumption 
D)  minimization of trade surpluses, whereas the comparative advantage theory focuses on the mercantilist idea that international trade is a zero-sum game

Question 13

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.
-In reviewing his fulfillment process,Jack realizes that different customers opt for different types of shipping based on their preferences.Which of the following would most likely help Jack provide better shipping service to his customers?

Accepted Answer

A)  introduce overnight delivery but at a very high cost 
B)  reduce costs by implementing a cheaper but slower delivery method 
C)  implement a universal delivery method to capitalize on efficiency gains 
D)  offer customers a choice of delivery methods with different speeds and costs 
A)  introduce overnight delivery but at a very high cost 
B)  reduce costs by implementing a cheaper but slower delivery method 
C)  implement a universal delivery method to capitalize on efficiency gains 
D)  offer customers a choice of delivery methods with different speeds and costs

Question 14

When a country's currency is stronger relative to other nations,domestic products are more expensive than imports.

Accepted Answer

A) True 
 B)False

Question 15

According to mercantilism,what should a country's primary goal be?

Accepted Answer

A)  protecting citizens from unfair labor practices 
B)  encouraging imports to prevent resource depletion 
C)  promoting exports to enlarge gold and silver holdings 
D)  ensuring sufficient labor for low-wage jobs in the textile industry 
A)  protecting citizens from unfair labor practices 
B)  encouraging imports to prevent resource depletion 
C)  promoting exports to enlarge gold and silver holdings 
D)  ensuring sufficient labor for low-wage jobs in the textile industry

Question 16

Scenario: Foodland and Drinkland
Two countries, Foodland and Drinkland, produce food and drinks. In Foodland, one resource unit produces 20 tons of food and one resource unit produces 10 tons of drinks. In Drinkland, one resource unit produces 12 tons of food and one resource unit produces 24 tons of drinks.
Food Drinks
Foodland 20 10
Drinkland 12 24
-Which of the following statements is true of the above scenario?

Accepted Answer

A)  Foodland has a comparative advantage in producing drinks. 
B)  Drinkland cannot trade with Foodland because trade is too expensive. 
C)  Drinkland has an absolute advantage in producing drinks. 
D)  Foodland should stop producing food and just produce drinks. 
A)  Foodland has a comparative advantage in producing drinks. 
B)  Drinkland cannot trade with Foodland because trade is too expensive. 
C)  Drinkland has an absolute advantage in producing drinks. 
D)  Foodland should stop producing food and just produce drinks.

Question 17

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 18

Discuss the volume of international trade,and explain the role government and chance play in the growth of international trade.

Accepted Answer

The value and volume of international tr

Question 19

A product's components are manufactured in a country that can produce them at a very low cost while maintaining its quality.These components are then assembled in another country where productivity in assembly is high.This process resembles the theory of ________.

Accepted Answer

A)  comparative advantage 
B)  mercantilism 
C)  the international product life cycle 
D)  factor proportions 
A)  comparative advantage 
B)  mercantilism 
C)  the international product life cycle 
D)  factor proportions

Question 20

The factor proportions theory of international trade was developed by Heckscher-Ohlin.

Accepted Answer

A) True 
 B)False

The measures of a nation's well-being other than the financial wealth accumulated through exports are irrelevant according to ________.

During which of the following stages of the international product life cycle theory does high purchasing power and buyer demand in an industrialized nation encourage a company to design and introduce a product concept?

Country A produces a ton of coffee using one unit of resources.Country B produces two tons of coffee using one unit of resources.Which of the following is true regarding Country A and Country B?

Trade in services tends to be relatively more important for the world's richest countries.

The ________ theory states that countries produce and export goods that require resources available in abundance and import goods that require resources in short supply.

Trade between most nations is presently characterized by a certain degree of isolationism.

The ability of a nation to produce a good more efficiently than any other nation is called its absolute advantage.

Explain mercantilism.What were its major flaws?

The theories of comparative advantage and absolute advantage assume that countries are driven only by the maximization of production and consumption.

Economist David Ricardo developed the theory of comparative advantage.

Factor proportions theory states that factors in great supply relative to demand will be more costly than factors in short supply relative to demand.

Factor proportions theory differs from the theory of comparative advantage in that the focus of factor proportions theory is on the ________.

When a country's currency is stronger relative to other nations,domestic products are more expensive than imports.

According to mercantilism,what should a country's primary goal be?

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?

Discuss the volume of international trade,and explain the role government and chance play in the growth of international trade.

A product's components are manufactured in a country that can produce them at a very low cost while maintaining its quality.These components are then assembled in another country where productivity in assembly is high.This process resembles the theory of ________.

The factor proportions theory of international trade was developed by Heckscher-Ohlin.

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

The measures of a nation's well-being other than the financial wealth accumulated through exports are irrelevant according to ________.

During which of the following stages of the international product life cycle theory does high purchasing power and buyer demand in an industrialized nation encourage a company to design and introduce a product concept?

Country A produces a ton of coffee using one unit of resources.Country B produces two tons of coffee using one unit of resources.Which of the following is true regarding Country A and Country B?

Trade in services tends to be relatively more important for the world's richest countries.

The ________ theory states that countries produce and export goods that require resources available in abundance and import goods that require resources in short supply.

Trade between most nations is presently characterized by a certain degree of isolationism.

The ability of a nation to produce a good more efficiently than any other nation is called its absolute advantage.

Explain mercantilism.What were its major flaws?

The theories of comparative advantage and absolute advantage assume that countries are driven only by the maximization of production and consumption.

Economist David Ricardo developed the theory of comparative advantage.

Factor proportions theory states that factors in great supply relative to demand will be more costly than factors in short supply relative to demand.

Factor proportions theory differs from the theory of comparative advantage in that the focus of factor proportions theory is on the ________.

When a country's currency is stronger relative to other nations,domestic products are more expensive than imports.

According to mercantilism,what should a country's primary goal be?

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?

Discuss the volume of international trade,and explain the role government and chance play in the growth of international trade.

A product's components are manufactured in a country that can produce them at a very low cost while maintaining its quality.These components are then assembled in another country where productivity in assembly is high.This process resembles the theory of ________.

The factor proportions theory of international trade was developed by Heckscher-Ohlin.

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