Exam 5: International Trade Theory

According to the theory of ________,trade is beneficial even if one country is less efficient in the production of two goods,as long as it is less inefficient in the production of one of the goods.

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

Much production in the world today closely resembles what is predicted by the ________.

Describe the potential benefits of international trade.Why would a nation trading with a neo-mercantilist country be at a disadvantage?

The danger of trade dependency is that ________.

Most of the world's merchandise trade is composed of trade in manufactured products.

Companies that belong to a nation's internationally competitive industries exist in isolation from supporting industries.

The condition that results when the value of a country's imports is greater than the value of its exports is called ________.

Scenario: Chuck Praeger, Global Entrepreneur Chuck Praeger has made a name for himself by selling high-quality golf equipment to customers in Europe. He would like to expand his business into the Pacific Rim countries and has therefore, begun making inquiries into potential distributors. -Chuck is convinced that his golf equipment will sell itself.But he is preparing a special presentation for Asian customers because he wants to make a good first impression.As an expert in culture of the Pacific Rim countries,which of the following would be your most likely advice to Chuck?

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 -Based on the above scenario,which of the following statements is true?

The importance of trade for a nation can be measured by ________.

One of the major pillars upon which the practice of mercantilism rested was ________.

Today,countries seen by others as trying to maintain a trade surplus and expand their national treasures at the expense of other nations are accused of practicing ________.

The theories of comparative and absolute advantage assume that specialization in the production of one particular good results in efficiency gains.

Scenario: Chuck Praeger, Global Entrepreneur Chuck Praeger has made a name for himself by selling high-quality golf equipment to customers in Europe. He would like to expand his business into the Pacific Rim countries and has therefore, begun making inquiries into potential distributors. -Chuck believes that his business has grown because of his personal involvement in every step of the way.What advice do you offer Chuck as he continues to expand his business in new Asian markets?

According to mercantilism,the accumulation of national wealth depended on the ________.

Explain how both the international product life cycle theory and the new trade theory ultimately result in lower priced goods.Include a definition of "first mover advantage" in your answer.

Mercantilism states that nations should only concern themselves with accumulating financial wealth.

Which element of national competitive advantage theory divides resources into two groups: basic and advanced?

International trade is the purchase,sale,or exchange of goods and services across national borders.