Question 1

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

Accepted Answer

A) True 
 B)False  False

Question 2

Adam Smith believed that ________.

Accepted Answer

A) governments should determine trade flows 
B) market forces should determine trade flows 
C) international trade should be restricted by tariffs and quotas 
D) countries should produce most goods themselves and trade as little as possible 
A) governments should determine trade flows 
B) market forces should determine trade flows 
C) international trade should be restricted by tariffs and quotas 
D) countries should produce most goods themselves and trade as little as possible B

Question 3

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

Accepted Answer

A) True 
 B)False  True

Question 4

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 5

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.

Accepted Answer

A) absolute advantage 
B) mercantilism 
C) comparative advantage 
D) factor proportions 
A) absolute advantage 
B) mercantilism 
C) comparative advantage 
D) factor proportions

Question 6

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 7

The focus of factor proportions theory is on the ________.

Accepted Answer

A) productivity of the production process 
B) cost-effectiveness of the production process 
C) use of depleting production factors 
D) use of expensive production factors 
A) productivity of the production process 
B) cost-effectiveness of the production process 
C) use of depleting production factors 
D) use of expensive production factors

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

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 10

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

Accepted Answer

In the early 1900s,an international trad

Question 11

________ 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 12

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 13

According to Adam Smith,international trade should be restricted by tariffs and quotas in order to give a country an absolute advantage.

Accepted Answer

A) True 
 B)False

Question 14

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 15

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

Accepted Answer

The purchase,sale,or exchange of goods a

Question 16

The smallest portion of the total world trade comprises trade between ________.

Accepted Answer

A) high-income and middle-income nations 
B) low-income and middle-income nations 
C) developed countries 
D) First World member countries 
A) high-income and middle-income nations 
B) low-income and middle-income nations 
C) developed countries 
D) First World member countries

Question 17

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 18

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

Accepted Answer

A) new trade theory 
B) international product life cycle 
C) theory of comparative advantage 
D) theory of factor proportions 
A) new trade theory 
B) international product life cycle 
C) theory of comparative advantage 
D) theory of factor proportions

Question 19

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

Question 20

A third country,Funland,also produces food and drinks.In Funland,one resource unit produces 8 tons of food and 6 tons of drinks.Which of the following is true about Funland,Foodland,and Drinkland?

Accepted Answer

A) Funland has a comparative advantage in producing drinks. 
B) Funland has a comparative advantage in producing food. 
C) Funland has an absolute advantage in producing food. 
D) Funland has an absolute advantage in producing drinks. 
A) Funland has a comparative advantage in producing drinks. 
B) Funland has a comparative advantage in producing food. 
C) Funland has an absolute advantage in producing food. 
D) Funland has an absolute advantage in producing drinks.

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

Adam Smith believed that ________.

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

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.

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?

The focus of factor proportions theory is on the ________.

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

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

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

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

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

According to Adam Smith,international trade should be restricted by tariffs and quotas in order to give a country an absolute advantage.

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

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

The smallest portion of the total world trade comprises trade between ________.

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 ________.

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

Eventually,Wallace expects that domestic production of the mousetrap will cease altogether.This would happen in the ________ stage of the product life cycle.

A third country,Funland,also produces food and drinks.In Funland,one resource unit produces 8 tons of food and 6 tons of drinks.Which of the following is true about Funland,Foodland,and Drinkland?

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.

Adam Smith believed that ________.

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

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.

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?

The focus of factor proportions theory is on the ________.

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

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

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

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

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

According to Adam Smith,international trade should be restricted by tariffs and quotas in order to give a country an absolute advantage.

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

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

The smallest portion of the total world trade comprises trade between ________.

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 ________.

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

Eventually,Wallace expects that domestic production of the mousetrap will cease altogether.This would happen in the ________ stage of the product life cycle.

A third country,Funland,also produces food and drinks.In Funland,one resource unit produces 8 tons of food and 6 tons of drinks.Which of the following is true about Funland,Foodland,and Drinkland?

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