Question 1

The product life-cycle theory argues that a large proportion of the world's new products had been developed by U.S. firms.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Identify a major disadvantage of the product life-cycle theory.

Accepted Answer

Viewed from an Asian or European perspec

Question 4

Resources always move easily from one economic activity to another.

Accepted Answer

A) True 
 B)False

Question 5

Factor endowments refer to the extent to which a country is gifted with such resources as land, labor, and capital.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is the main principle of mercantilism?

Accepted Answer

A)  Protection of domestic industries is not essential for a nation's welfare. 
B)  Government intervention is not required in global trade. 
C)  Countries should encourage absolute free trade. 
D)  It is in a country's best interests to maintain a trade surplus. 
A)  Protection of domestic industries is not essential for a nation's welfare. 
B)  Government intervention is not required in global trade. 
C)  Countries should encourage absolute free trade. 
D)  It is in a country's best interests to maintain a trade surplus.

Question 7

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.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

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 10

What are factor endowments?

Accepted Answer

Factor endowments refer to the extent to

Question 11

Which of the following statements is true of the Leontief Paradox?

Accepted Answer

A)  It shows an anomaly that occurs when a nation has high domestic demand for a product. 
B)  It explains the relationship between domestic demand and comparative advantage. 
C)  It disproved Ricardo's theory of comparative advantage. 
D)  It raised questions about the validity of the Heckscher-Ohlin theory. 
A)  It shows an anomaly that occurs when a nation has high domestic demand for a product. 
B)  It explains the relationship between domestic demand and comparative advantage. 
C)  It disproved Ricardo's theory of comparative advantage. 
D)  It raised questions about the validity of the Heckscher-Ohlin theory.

Question 12

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

Accepted Answer

First, free trade might increase a count

Question 13

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

Accepted Answer

A)  Heckscher-Ohlin stresses on the differences in productivity between nations. 
B)  Ricardo's theory considers factor endowments to describe national competitiveness. 
C)  Heckscher-Ohlin theory makes fewer simplifying assumptions. 
D)  Ricardo's theory considers the law of marginal returns. 
A)  Heckscher-Ohlin stresses on the differences in productivity between nations. 
B)  Ricardo's theory considers factor endowments to describe national competitiveness. 
C)  Heckscher-Ohlin theory makes fewer simplifying assumptions. 
D)  Ricardo's theory considers the law of marginal returns.

Question 14

According to Ricardo's theory of comparative advantage, a country should produce goods ____.

Accepted Answer

A)  for which it has access to raw materials 
B)  that it produces most efficiently 
C)  that have the highest domestic demand 
D)  for which it has an absolute advantage 
A)  for which it has access to raw materials 
B)  that it produces most efficiently 
C)  that have the highest domestic demand 
D)  for which it has an absolute advantage

Question 15

What are the four attributes that are discussed in Porter's diamond?

Accepted Answer

The four factors are:
(1) Factor endowme

Question 16

The product life-cycle theory argues that the developing nations will not produce a product if the product is highly standardized.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following theories suggests that first mover advantage is significant in the export of a good?

Accepted Answer

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

Question 18

How does the Heckscher-Ohlin theory explain international trade?

Accepted Answer

The Heckscher-Ohlin theory emphasizes th

Question 19

Briefly differentiate between constant returns to specialization and diminishing returns to specialization.

Accepted Answer

By constant returns to specialization we

Question 20

The simple comparative advantage model assumed that trade does not change a country's stock of resources or the efficiency with which it utilizes those resources.

Accepted Answer

A) True 
 B)False

The product life-cycle theory argues that a large proportion of the world's new products had been developed by U.S. firms.

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

Identify a major disadvantage of the product life-cycle theory.

Resources always move easily from one economic activity to another.

Factor endowments refer to the extent to which a country is gifted with such resources as land, labor, and capital.

Which of the following is the main principle of mercantilism?

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.

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

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?

What are factor endowments?

Which of the following statements is true of the Leontief Paradox?

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

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

According to Ricardo's theory of comparative advantage, a country should produce goods ____.

What are the four attributes that are discussed in Porter's diamond?

The product life-cycle theory argues that the developing nations will not produce a product if the product is highly standardized.

Which of the following theories suggests that first mover advantage is significant in the export of a good?

How does the Heckscher-Ohlin theory explain international trade?

Briefly differentiate between constant returns to specialization and diminishing returns to specialization.

The simple comparative advantage model assumed that trade does not change a country's stock of resources or the efficiency with which it utilizes those resources.

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

The product life-cycle theory argues that a large proportion of the world's new products had been developed by U.S. firms.

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

Identify a major disadvantage of the product life-cycle theory.

Resources always move easily from one economic activity to another.

Factor endowments refer to the extent to which a country is gifted with such resources as land, labor, and capital.

Which of the following is the main principle of mercantilism?

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.

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

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?

What are factor endowments?

Which of the following statements is true of the Leontief Paradox?

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

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

According to Ricardo's theory of comparative advantage, a country should produce goods ____.

What are the four attributes that are discussed in Porter's diamond?

The product life-cycle theory argues that the developing nations will not produce a product if the product is highly standardized.

Which of the following theories suggests that first mover advantage is significant in the export of a good?

How does the Heckscher-Ohlin theory explain international trade?

Briefly differentiate between constant returns to specialization and diminishing returns to specialization.

The simple comparative advantage model assumed that trade does not change a country's stock of resources or the efficiency with which it utilizes those resources.

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