Exam 5: International Trade Theory

Factor proportions theory states that a country will produce and export those goods that require resources abundantly available within the country.

The focus of factor proportions theory is on the ________.

Who proposed the theory of absolute advantage?

When a country is not able to produce a good more efficiently than other nations,but produces the good more efficiently than it does any other good,it is said to have a(n)________.

Which factors of production did Leontief focus on?

Another term for neomercantilism is ________.

The theory of absolute advantage destroys the mercantilist idea that international trade is a zero-sum game.

Discuss the three essential pillars of the theory of mercantilism.

Discuss the limitations of the international product life cycle theory.How well does the theory explain current trade patterns?

According to Michael Porter,advanced factors account for the sustained competitive advantage a country enjoys in a product.

Nations following the theory of ________ believed that the world's wealth was limited and that a nation could increase its share of the pie only at the expense of its neighbors.

Explain how the theory of absolute advantage conflicts with the theory of mercantilism.

The theory of comparative advantage was proposed by ________.

The international product life cycle theory was put forth for ________.

Explain the theory of comparative advantage using an example,and describe its assumptions and limitations.

The international product life cycle theory was developed by ________.

In which stage of the international product life cycle does the innovating firm's country become a net importer of the product?

According to the international product life cycle theory,the innovating firm's country is primarily an exporter of the product in all three stages.

According to the Porter diamond,which of the following is an example of an advanced factor?

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. -National competitive advantage theory states that a nation's competitiveness in an industry depends on ________.