Question 1

The value of trade passing through the borders of all countries exceeds the amount of goods and services they produce.

Accepted Answer

A) True 
 B)False

Question 2

In the maturing product stage of the international product life cycle theory,production facilities are introduced in countries with the highest demand.

Accepted Answer

A) True 
 B)False

Question 3

Explain mercantilism.What were its major flaws?

Accepted Answer

The trade theory that nations should acc

Question 4

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 5

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

Accepted Answer

Raymond Vernon developed the internation

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is an argument offered by the new trade theory?

Accepted Answer

A) It is in line with the factor proportions theory. 
B) There are gains to be made from specialization and increasing economies of scale. 
C) The companies first to market forgo the opportunities to create barriers to entry. 
D) Market forces alone play a role in assisting the home companies in a country. 
A) It is in line with the factor proportions theory. 
B) There are gains to be made from specialization and increasing economies of scale. 
C) The companies first to market forgo the opportunities to create barriers to entry. 
D) Market forces alone play a role in assisting the home companies in a country.

Question 8

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?

Accepted Answer

A) Contact distributors directly to avoid misunderstandings that can arise when using third-party contacts. 
B) Always stick to corporate settings when doing business to avoid misunderstandings that can arise in less formal environments. 
C) Protect your interests by insisting on detailed contracts from the start. 
D) Use proper intermediaries as required in Pacific Rim nations. 
A) Contact distributors directly to avoid misunderstandings that can arise when using third-party contacts. 
B) Always stick to corporate settings when doing business to avoid misunderstandings that can arise in less formal environments. 
C) Protect your interests by insisting on detailed contracts from the start. 
D) Use proper intermediaries as required in Pacific Rim nations.

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

Accepted Answer

A) a trade deficit 
B) a trade surplus 
C) mercantilism 
D) dumping 
A) a trade deficit 
B) a trade surplus 
C) mercantilism 
D) dumping

Question 11

A majority of the total world merchandise trade occurs among ________.

Accepted Answer

A) middle-income and low-income economies 
B) high-income economies 
C) newly industrialized countries 
D) emerging markets 
A) middle-income and low-income economies 
B) high-income economies 
C) newly industrialized countries 
D) emerging markets

Question 12

The Leontief paradox describes evidence ________.

Accepted Answer

A) in support of the predictions of the mercantilist theory 
B) contrary to the predictions of the factor proportions theory 
C) that the assumptions of international product life cycle theory are invalid 
D) that the assumptions of the new trade theory are invalid 
A) in support of the predictions of the mercantilist theory 
B) contrary to the predictions of the factor proportions theory 
C) that the assumptions of international product life cycle theory are invalid 
D) that the assumptions of the new trade theory are invalid

Question 13

Discuss the factor proportions theory and describe the evidence on this theory.

Accepted Answer

In the early 1900s,an international trad

Question 14

In the ________ of the international product life cycle,competition from other companies selling similar products pressures companies to lower prices in order to maintain sales levels.

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 15

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

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) economies of scale 
B) pricing mechanism 
C) excessive imports 
D) trade surpluses 
A) economies of scale 
B) pricing mechanism 
C) excessive imports 
D) trade surpluses

Question 17

An absolute advantage is the economic and strategic advantage gained by being the first company to enter an industry.

Accepted Answer

A) True 
 B)False

Question 18

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?

Accepted Answer

A) Foodland has an absolute advantage in producing food. 
B) Foodland has an absolute advantage in producing drinks. 
C) Drinkland has an absolute advantage in producing both food and drinks. 
D) Drinkland has an absolute advantage in producing food. 
A) Foodland has an absolute advantage in producing food. 
B) Foodland has an absolute advantage in producing drinks. 
C) Drinkland has an absolute advantage in producing both food and drinks. 
D) Drinkland has an absolute advantage in producing food.

Question 19

Explain how the national competitive advantage theory supports and builds upon the factor proportions theory.

Accepted Answer

The factor proportions theory is an inte

Question 20

Economist David Ricardo developed the theory of comparative advantage.

Accepted Answer

A) True 
 B)False

The value of trade passing through the borders of all countries exceeds the amount of goods and services they produce.

In the maturing product stage of the international product life cycle theory,production facilities are introduced in countries with the highest demand.

Explain mercantilism.What were its major flaws?

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

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

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

Which of the following is an argument offered by the new trade theory?

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

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

A majority of the total world merchandise trade occurs among ________.

The Leontief paradox describes evidence ________.

Discuss the factor proportions theory and describe the evidence on this theory.

In the ________ of the international product life cycle,competition from other companies selling similar products pressures companies to lower prices in order to maintain sales levels.

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

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

An absolute advantage is the economic and strategic advantage gained by being the first company to enter an industry.

Explain how the national competitive advantage theory supports and builds upon the factor proportions theory.

Economist David Ricardo developed the theory of comparative advantage.

Globalization

Cross-Cultural Business

Politics, Law, and Business Ethics

Economics and Emerging Markets

Business-Government Trade Relations

Foreign Direct Investment

Regional Economic Integration

International Financial Markets

International Money 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

The value of trade passing through the borders of all countries exceeds the amount of goods and services they produce.

In the maturing product stage of the international product life cycle theory,production facilities are introduced in countries with the highest demand.

Explain mercantilism.What were its major flaws?

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

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

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

Which of the following is an argument offered by the new trade theory?

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

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

A majority of the total world merchandise trade occurs among ________.

The Leontief paradox describes evidence ________.

Discuss the factor proportions theory and describe the evidence on this theory.

In the ________ of the international product life cycle,competition from other companies selling similar products pressures companies to lower prices in order to maintain sales levels.

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

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

An absolute advantage is the economic and strategic advantage gained by being the first company to enter an industry.

Explain how the national competitive advantage theory supports and builds upon the factor proportions theory.

Economist David Ricardo developed the theory of comparative advantage.

Globalization

Cross-Cultural Business

Politics, Law, and Business Ethics

Economics and Emerging Markets

Business-Government Trade Relations

Foreign Direct Investment

Regional Economic Integration

International Financial Markets

International Money 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