Question 1

Identify a major flaw associated with mercantilism.

Accepted Answer

The flaw with mercantilism was

Question 2

Which of the following factors, according to Porter's national Diamond, is most likely to give a country competitive advantage over another country?

Accepted Answer

A)  Natural resources 
B)  Climate 
C)  Skilled labor 
D)  Demographics 
A)  Natural resources 
B)  Climate 
C)  Skilled labor 
D)  Demographics

Question 3

A capital intensive country exports products that are capital intensive. This is an example of Leontief Paradox.

Accepted Answer

A) True 
 B)False

Question 4

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 5

Mercantilism supports the idea that countries should export more than what they import.

Accepted Answer

A) True 
 B)False

Question 6

Explain how the principle of diminishing returns weakens the Ricardian model.

Accepted Answer

Diminishing returns show that it is not

Question 7

Paul Samuelson's critique argues that trade is a positive-sum game in which all countries that participate realize economic gains.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Company A entered the production of office software before its competitors. Because of this, the company's products are more familiar among and favored by customers. This situation exemplifies the ____.

Accepted Answer

A)  first-mover advantage 
B)  diminishing marginal returns 
C)  economies of scale 
D)  constant marginal returns 
A)  first-mover advantage 
B)  diminishing marginal returns 
C)  economies of scale 
D)  constant marginal returns

Question 10

Textile industry in a nation is characterized by vigorous domestic rivalry. Which of the following observations of this nation's international competency is most likely to be true?

Accepted Answer

A)  The nation will have access to such basic factors of textile industry as natural resources. 
B)  The nation's textile firms will have a competitive advantage in international trade. 
C)  The domestic customers of the textile firms will be less demanding. 
D)  The nation's textile industry will lack the advanced factors that are necessary to be internationally competent. 
A)  The nation will have access to such basic factors of textile industry as natural resources. 
B)  The nation's textile firms will have a competitive advantage in international trade. 
C)  The domestic customers of the textile firms will be less demanding. 
D)  The nation's textile industry will lack the advanced factors that are necessary to be internationally competent.

Question 11

Explain Ricardo's theory of comparative advantage.

Accepted Answer

According to Ricardo's theory of compara

Question 12

Mercantilist doctrine advocates unrestricted free trade between countries.

Accepted Answer

A) True 
 B)False

Question 13

According to the new trade theory, firms that establish a first-mover advantage with regard to the production of a particular new product may subsequently dominate global trade in that product.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a major limitation of the simple Ricardian model of comparative advantage?

Accepted Answer

A)  The model ignores the principle of diminishing marginal returns. 
B)  The model recommends excessive governmental intervention in trade. 
C)  The outcome of the model suggested by Ricardo is a zero-sum game. 
D)  The model is against the idea of engaging in free trade with nations. 
A)  The model ignores the principle of diminishing marginal returns. 
B)  The model recommends excessive governmental intervention in trade. 
C)  The outcome of the model suggested by Ricardo is a zero-sum game. 
D)  The model is against the idea of engaging in free trade with nations.

Question 15

New trade theorists stress the role of luck in giving a firm first-mover advantages.

Accepted Answer

A) True 
 B)False

Question 16

The principle of mercantilism views trade as a positive-sum game.

Accepted Answer

A) True 
 B)False

Question 17

The Heckscher-Ohlin theory argues that the pattern of international trade is determined by differences in factor endowments.

Accepted Answer

A) True 
 B)False

Question 18

Identify the theory that argues that advanced nations have an incentive to develop a new offering and hence such nations always tend to create a good or service for the first time.

Accepted Answer

A)  Absolute advantage 
B)  Ricardo 
C)  Product life-cycle 
D)  Heckscher-Ohlin 
A)  Absolute advantage 
B)  Ricardo 
C)  Product life-cycle 
D)  Heckscher-Ohlin

Question 19

What are first-mover advantages?

Accepted Answer

First-mover advantages are the economic

Question 20

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

Accepted Answer

A)  Mercantilists do not support government intervention in trade. 
B)  Mercantilists view trade as a zero-sum game. 
C)  Mercantilists recommend policies to maximize imports. 
D)  Mercantilists recommend countries to maintain a negative trade balance. 
A)  Mercantilists do not support government intervention in trade. 
B)  Mercantilists view trade as a zero-sum game. 
C)  Mercantilists recommend policies to maximize imports. 
D)  Mercantilists recommend countries to maintain a negative trade balance.

Identify a major flaw associated with mercantilism.

Which of the following factors, according to Porter's national Diamond, is most likely to give a country competitive advantage over another country?

A capital intensive country exports products that are capital intensive. This is an example of Leontief Paradox.

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

Mercantilism supports the idea that countries should export more than what they import.

Explain how the principle of diminishing returns weakens the Ricardian model.

Paul Samuelson's critique argues that trade is a positive-sum game in which all countries that participate realize economic gains.

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

Company A entered the production of office software before its competitors. Because of this, the company's products are more familiar among and favored by customers. This situation exemplifies the ____.

Textile industry in a nation is characterized by vigorous domestic rivalry. Which of the following observations of this nation's international competency is most likely to be true?

Explain Ricardo's theory of comparative advantage.

Mercantilist doctrine advocates unrestricted free trade between countries.

According to the new trade theory, firms that establish a first-mover advantage with regard to the production of a particular new product may subsequently dominate global trade in that product.

Which of the following is a major limitation of the simple Ricardian model of comparative advantage?

New trade theorists stress the role of luck in giving a firm first-mover advantages.

The principle of mercantilism views trade as a positive-sum game.

The Heckscher-Ohlin theory argues that the pattern of international trade is determined by differences in factor endowments.

Identify the theory that argues that advanced nations have an incentive to develop a new offering and hence such nations always tend to create a good or service for the first time.

What are first-mover advantages?

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

Globalization

National Differences in Political Economy

Political Economy and Economic Development

Differences in Culture

Ethics in International Business

The Political Economy of International Trade

Foreign Direct Investment

Regional Economic Integration

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, Outsourcing, and Logistics

Global Marketing and RD

Global Human Resource Management

Accounting and Finance in the International Business

Filters

Exam 6: International Trade Theory

Identify a major flaw associated with mercantilism.

Which of the following factors, according to Porter's national Diamond, is most likely to give a country competitive advantage over another country?

A capital intensive country exports products that are capital intensive. This is an example of Leontief Paradox.

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

Mercantilism supports the idea that countries should export more than what they import.

Explain how the principle of diminishing returns weakens the Ricardian model.

Paul Samuelson's critique argues that trade is a positive-sum game in which all countries that participate realize economic gains.

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

Company A entered the production of office software before its competitors. Because of this, the company's products are more familiar among and favored by customers. This situation exemplifies the ____.

Textile industry in a nation is characterized by vigorous domestic rivalry. Which of the following observations of this nation's international competency is most likely to be true?

Explain Ricardo's theory of comparative advantage.

Mercantilist doctrine advocates unrestricted free trade between countries.

According to the new trade theory, firms that establish a first-mover advantage with regard to the production of a particular new product may subsequently dominate global trade in that product.

Which of the following is a major limitation of the simple Ricardian model of comparative advantage?

New trade theorists stress the role of luck in giving a firm first-mover advantages.

The principle of mercantilism views trade as a positive-sum game.

The Heckscher-Ohlin theory argues that the pattern of international trade is determined by differences in factor endowments.

Identify the theory that argues that advanced nations have an incentive to develop a new offering and hence such nations always tend to create a good or service for the first time.

What are first-mover advantages?

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

Globalization

National Differences in Political Economy

Political Economy and Economic Development

Differences in Culture

Ethics in International Business

The Political Economy of International Trade

Foreign Direct Investment

Regional Economic Integration

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, Outsourcing, and Logistics

Global Marketing and RD

Global Human Resource Management

Accounting and Finance in the International Business

Filters