Question 1

Which of the following is a major flaw associated with mercantilism?

Accepted Answer

A)  It viewed trade as a positive-sum game. 
B)  It relied on government to support trade. 
C)  It viewed trade as a zero-sum game. 
D)  It relied on tenuous free trade agreements. 
A)  It viewed trade as a positive-sum game. 
B)  It relied on government to support trade. 
C)  It viewed trade as a zero-sum game. 
D)  It relied on tenuous free trade agreements.

Question 2

Which of the following refers to a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country?

Accepted Answer

A)  Economic patriotism 
B)  Protectionism 
C)  Free trade 
D)  Offshoring 
A)  Economic patriotism 
B)  Protectionism 
C)  Free trade 
D)  Offshoring

Question 3

_____ stresses that in some cases countries specialize in the production and export of particular products because the world market can support only a limited number of firms.

Accepted Answer

A)  New trade theory 
B)  Absolute advantage 
C)  The world market theory 
D)  Mercantilism 
A)  New trade theory 
B)  Absolute advantage 
C)  The world market theory 
D)  Mercantilism

Question 4

_____ are unit cost reductions associated with a large scale of output.

Accepted Answer

A)  Current account deficits 
B)  Economies of scale 
C)  Current account surpluses 
D)  Factor endowments 
A)  Current account deficits 
B)  Economies of scale 
C)  Current account surpluses 
D)  Factor endowments

Question 5

Identify the theory that predicts that countries will export those goods that make intensive use of factors that are locally abundant.

Accepted Answer

A)  Theory of comparative advantage 
B)  Ricardo theory 
C)  New trade theory 
D)  Heckscher-Ohlin theory 
A)  Theory of comparative advantage 
B)  Ricardo theory 
C)  New trade theory 
D)  Heckscher-Ohlin theory

Question 6

Which of the following theories stress the role of luck, entrepreneurship, and innovation in the production and export of a good or service by the firms in a country?

Accepted Answer

A)  Product life-cycle theory 
B)  Ricardo's theory 
C)  Theory of comparative advantage 
D)  New trade theory 
A)  Product life-cycle theory 
B)  Ricardo's theory 
C)  Theory of comparative advantage 
D)  New trade theory

Question 7

The main tenet of mercantilism is that it is in a country's best interests to:

Accepted Answer

A)  maintain a trade deficit. 
B)  maintain a trade surplus. 
C)  Import goods made from products that it does not have in abundance. 
D)  import more than it exports. 
A)  maintain a trade deficit. 
B)  maintain a trade surplus. 
C)  Import goods made from products that it does not have in abundance. 
D)  import more than it exports.

Question 8

David Ricardo's theory of comparative advantage explains global trade in terms of the:

Accepted Answer

A)  first mover advantage that certain countries and firms enjoy. 
B)  geographical differences between various countries. 
C)  international differences in labor productivity. 
D)  late mover advantage that certain countries and firms possess. 
A)  first mover advantage that certain countries and firms enjoy. 
B)  geographical differences between various countries. 
C)  international differences in labor productivity. 
D)  late mover advantage that certain countries and firms possess.

Question 9

The _____ argues that a large proportion of the world's new products had been developed by U.S. firms.

Accepted Answer

A)  product life-cycle theory 
B)  Porter Diamond Model 
C)  new trade theory 
D)  Leontief Paradox 
A)  product life-cycle theory 
B)  Porter Diamond Model 
C)  new trade theory 
D)  Leontief Paradox

Question 10

Porter's theory of national competitive advantage recommends unrestricted free trade between countries.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following terms refers to the unit cost reductions associated with large sized outputs?

Accepted Answer

A)  Absolute advantage of production 
B)  Economies of scale 
C)  Constant marginal returns 
D)  Diminishing marginal returns 
A)  Absolute advantage of production 
B)  Economies of scale 
C)  Constant marginal returns 
D)  Diminishing marginal returns

Question 12

David Ricardo's theory of comparative advantage explains:

Accepted Answer

A)  domestic trade in terms of international differences in political environments. 
B)  international trade in terms of international differences in political environments. 
C)  domestic trade in terms of international differences in labor productivity. 
D)  international trade in terms of international differences in labor productivity. 
A)  domestic trade in terms of international differences in political environments. 
B)  international trade in terms of international differences in political environments. 
C)  domestic trade in terms of international differences in labor productivity. 
D)  international trade in terms of international differences in labor productivity.

Question 13

The production possibility frontier will be parabolic if constant return to specialization is observed.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is an example of a basic factor that a nation will possess as proposed by Porter?

Accepted Answer

A)  Communication infrastructure 
B)  Skilled labor 
C)  Natural resources 
D)  Technological knowledge 
A)  Communication infrastructure 
B)  Skilled labor 
C)  Natural resources 
D)  Technological knowledge

Question 15

A key assumption in the Heckscher-Ohlin theory is that technologies are the same across countries.

Accepted Answer

A) True 
 B)False

Question 16

A rich country improves its productivity by engaging in free trade with a poor country. This situation supports Paul Samuelson's critique.

Accepted Answer

A) True 
 B)False

Question 17

Explain the dynamic gains that are generated by opening an economy to trade.

Accepted Answer

First, free trade might increase a count

Question 18

New trade theory suggests that nations:

Accepted Answer

A)  increase their commitment to research and development. 
B)  adopt policies that promote strong competition within domestic markets. 
C)  cannot benefit from trade when they do not differ in resource endowments or technology. 
D)  may benefit from trade even when they do not differ in resource endowments or technology. 
A)  increase their commitment to research and development. 
B)  adopt policies that promote strong competition within domestic markets. 
C)  cannot benefit from trade when they do not differ in resource endowments or technology. 
D)  may benefit from trade even when they do not differ in resource endowments or technology.

Question 19

Mercantilist doctrine advocates unrestricted free trade between countries.

Accepted Answer

A) True 
 B)False

Question 20

One of the advantages of being the first mover in a market is:

Accepted Answer

A)  there is little risk involved. 
B)  to benefit from a higher cost structure. 
C)  the ability to capture scale economies ahead of later entrants. 
D)  local governments are more favorable to the first movers. 
A)  there is little risk involved. 
B)  to benefit from a higher cost structure. 
C)  the ability to capture scale economies ahead of later entrants. 
D)  local governments are more favorable to the first movers.

Which of the following is a major flaw associated with mercantilism?

Which of the following refers to a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country?

_____ stresses that in some cases countries specialize in the production and export of particular products because the world market can support only a limited number of firms.

_____ are unit cost reductions associated with a large scale of output.

Identify the theory that predicts that countries will export those goods that make intensive use of factors that are locally abundant.

Which of the following theories stress the role of luck, entrepreneurship, and innovation in the production and export of a good or service by the firms in a country?

The main tenet of mercantilism is that it is in a country's best interests to:

David Ricardo's theory of comparative advantage explains global trade in terms of the:

The _____ argues that a large proportion of the world's new products had been developed by U.S. firms.

Porter's theory of national competitive advantage recommends unrestricted free trade between countries.

Which of the following terms refers to the unit cost reductions associated with large sized outputs?

David Ricardo's theory of comparative advantage explains:

The production possibility frontier will be parabolic if constant return to specialization is observed.

Which of the following is an example of a basic factor that a nation will possess as proposed by Porter?

A key assumption in the Heckscher-Ohlin theory is that technologies are the same across countries.

A rich country improves its productivity by engaging in free trade with a poor country. This situation supports Paul Samuelson's critique.

Explain the dynamic gains that are generated by opening an economy to trade.

New trade theory suggests that nations:

Mercantilist doctrine advocates unrestricted free trade between countries.

One of the advantages of being the first mover in a market is:

Globalization

National Differences in Political Economy, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, Corporate Social Responsibility, and Sustainability

Government Policy and International Trade

Foreign Direct Investment

Regional Trade Pacts Give the Mexican Auto Industry an Edge

The Foreign Exchange Market

The International Monetary System

The Global Capital Market

The Strategy of International Business

The Organization of International Business

Entry Strategy and Strategic Alliances

Exporting, Importing, and Countertrade

Global Production and Supply Chain Management

Global Marketing and RD

Global Human Resource Management

Accounting and Finance in the International Business

Filters

Exam 6: International Trade Theory

Which of the following is a major flaw associated with mercantilism?

Which of the following refers to a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country?

_____ stresses that in some cases countries specialize in the production and export of particular products because the world market can support only a limited number of firms.

_____ are unit cost reductions associated with a large scale of output.

Identify the theory that predicts that countries will export those goods that make intensive use of factors that are locally abundant.

Which of the following theories stress the role of luck, entrepreneurship, and innovation in the production and export of a good or service by the firms in a country?

The main tenet of mercantilism is that it is in a country's best interests to:

David Ricardo's theory of comparative advantage explains global trade in terms of the:

The _____ argues that a large proportion of the world's new products had been developed by U.S. firms.

Porter's theory of national competitive advantage recommends unrestricted free trade between countries.

Which of the following terms refers to the unit cost reductions associated with large sized outputs?

David Ricardo's theory of comparative advantage explains:

The production possibility frontier will be parabolic if constant return to specialization is observed.

Which of the following is an example of a basic factor that a nation will possess as proposed by Porter?

A key assumption in the Heckscher-Ohlin theory is that technologies are the same across countries.

A rich country improves its productivity by engaging in free trade with a poor country. This situation supports Paul Samuelson's critique.

Explain the dynamic gains that are generated by opening an economy to trade.

New trade theory suggests that nations:

Mercantilist doctrine advocates unrestricted free trade between countries.

One of the advantages of being the first mover in a market is:

Globalization

National Differences in Political Economy, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, Corporate Social Responsibility, and Sustainability

Government Policy and International Trade

Foreign Direct Investment

Regional Trade Pacts Give the Mexican Auto Industry an Edge

The Foreign Exchange Market

The International Monetary System

The Global Capital Market

The Strategy of International Business

The Organization of International Business

Entry Strategy and Strategic Alliances

Exporting, Importing, and Countertrade

Global Production and Supply Chain Management

Global Marketing and RD

Global Human Resource Management

Accounting and Finance in the International Business

Filters