Exam 6: International Trade Theory

Which of the following is true regarding Porter's Diamond theory?

Which of the following is the main principle of mercantilism?

Which of the following accounts records transactions that involve the purchase or sale of assets?

Which of the following arguments supports the Paul Samuelson's critique?

The theories of international trade claim that promoting free trade is generally in the best interests of:

Which of the following observations is consistent with Michael Porter's theory of national competitive advantage?

First-mover advantages are the economic and strategic advantages that accrue to early entrants into an industry.

Which of the following is a theory that can be used to justify limited government intervention to support the development of certain export-oriented industries?

The theory of comparative advantage provides strong rationale for supporting the idea of _____.

Country X, a poor country, invents a revolutionary electronic product. The country markets this new product in other poor countries to garner large profits. This occurrence is against the idea of ____.

Diminishing returns show that it is feasible for a country to specialize to the degree suggested by the simple Ricardian model.

Do you think a new trade theorist would stress the role of luck and entrepreneurship? Explain.

_____ argued that countries should specialize in the production of goods for which they have an absolute advantage.

Underlying most of the trade theories discussed is the notion that:

Which of the following is a statement that supports the theory of comparative advantage?

Which of the following is the reason why most economists prefer Heckscher-Ohlin theory to Ricardo's theory?

Porter argues that a nation's firms gain competitive advantage if:

From a profit perspective, it makes sense for firms to disperse their productive activities to those countries where they can be performed most efficiently.

If foreigners suddenly reduced their investments in the United States, what would happen?

The theories of Smith and Ricardo show that countries should not engage in international trade for products that it is able to produce for itself.