Question 1

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 2

Which of the following terms refers to the extent to which a country is gifted with such resources as land,labor,and capital?

Accepted Answer

A)  Current accounts 
B)  Factor endowments 
C)  National balance 
D)  National accounts 
A)  Current accounts 
B)  Factor endowments 
C)  National balance 
D)  National accounts

Question 3

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 4

Companies that trade small volumes of product can benefit from economies of scale.

Accepted Answer

A) True 
 B)False

Question 5

Simple model of free trade assumed away transportation costs between countries.

Accepted Answer

A) True 
 B)False

Question 6

Briefly explain Vernon's product life-cycle theory.

Accepted Answer

Vernon's theory was based on the observa

Question 7

Explain the concept of free trade.

Accepted Answer

Free trade refers to a situation where a

Question 8

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

Accepted Answer

A)  their domestic consumers lack technical awareness 
B)  they function in a labor intensive market 
C)  the country has abundant supply of unskilled workers 
D)  their domestic consumers are demanding 
A)  their domestic consumers lack technical awareness 
B)  they function in a labor intensive market 
C)  the country has abundant supply of unskilled workers 
D)  their domestic consumers are demanding

Question 9

According to Adam Smith,A country should specialize in the production of a good when it has _____.

Accepted Answer

A)  an absolute advantage in the production of the good 
B)  a strong domestic demand for the good 
C)  the ability to help country increase its national output 
D)  the necessary raw materials for production 
A)  an absolute advantage in the production of the good 
B)  a strong domestic demand for the good 
C)  the ability to help country increase its national output 
D)  the necessary raw materials for production

Question 10

Variety of goods that a country can produce is limited by the size of the market in industries where economies of scale are important.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is a major disadvantage of the product life-cycle theory introduced by Vernon?

Accepted Answer

A)  The theory's arguments seem ethnocentric and increasingly dated. 
B)  The theory failed to explain the dominance of developed nations. 
C)  The theory applies only when a poor nation invents a new product. 
D)  The theory cannot be used to explain the production of luxury products. 
A)  The theory's arguments seem ethnocentric and increasingly dated. 
B)  The theory failed to explain the dominance of developed nations. 
C)  The theory applies only when a poor nation invents a new product. 
D)  The theory cannot be used to explain the production of luxury products.

Question 12

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

Accepted Answer

The four factors are:
(1)Factor endowmen

Question 13

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 14

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

Accepted Answer

A)  A rich country cannot produce net gains by engaging in free trade with a poor country. 
B)  Governmental intervention will reduce the likeliness of countries' economic success. 
C)  Countries should attempt to specialize in the production of goods and services. 
D)  Trade is a positive-sum game in which all countries that participate realize economic gains. 
A)  A rich country cannot produce net gains by engaging in free trade with a poor country. 
B)  Governmental intervention will reduce the likeliness of countries' economic success. 
C)  Countries should attempt to specialize in the production of goods and services. 
D)  Trade is a positive-sum game in which all countries that participate realize economic gains.

Question 15

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

Accepted Answer

A)  Capital account 
B)  Current account 
C)  Principal account 
D)  Financial account 
A)  Capital account 
B)  Current account 
C)  Principal account 
D)  Financial account

Question 16

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 17

Wal-Mart makes bulk purchases from its vendors and hence it is able to get better deals than its competitors.This allows Wal-Mart to offer greater discounts to its customers.In this case,Wal-Mart benefits from _____.

Accepted Answer

A)  first mover advantage 
B)  constant marginal returns 
C)  economies of scale 
D)  absolute advantage of production 
A)  first mover advantage 
B)  constant marginal returns 
C)  economies of scale 
D)  absolute advantage of production

Question 18

Identify the theory that supports the view that in some cases countries export for the reason that the world market can support only a limited number of firms.

Accepted Answer

A)  Heckscher-Ohlin theory 
B)  Smith's theory 
C)  Ricardo's theory 
D)  New trade theory 
A)  Heckscher-Ohlin theory 
B)  Smith's theory 
C)  Ricardo's theory 
D)  New trade theory

Question 19

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

Accepted Answer

Viewed from an Asian or European perspec

Question 20

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

Accepted Answer

A) True 
 B)False

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

Which of the following terms refers to the extent to which a country is gifted with such resources as land,labor,and capital?

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?

Companies that trade small volumes of product can benefit from economies of scale.

Simple model of free trade assumed away transportation costs between countries.

Briefly explain Vernon's product life-cycle theory.

Explain the concept of free trade.

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

According to Adam Smith,A country should specialize in the production of a good when it has _____.

Variety of goods that a country can produce is limited by the size of the market in industries where economies of scale are important.

Which of the following is a major disadvantage of the product life-cycle theory introduced by Vernon?

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

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

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

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

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

Wal-Mart makes bulk purchases from its vendors and hence it is able to get better deals than its competitors.This allows Wal-Mart to offer greater discounts to its customers.In this case,Wal-Mart benefits from _____.

Identify the theory that supports the view that in some cases countries export for the reason that the world market can support only a limited number of firms.

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

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

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 the reason why most economists prefer Heckscher-Ohlin theory to Ricardo's theory?

Which of the following terms refers to the extent to which a country is gifted with such resources as land,labor,and capital?

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?

Companies that trade small volumes of product can benefit from economies of scale.

Simple model of free trade assumed away transportation costs between countries.

Briefly explain Vernon's product life-cycle theory.

Explain the concept of free trade.

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

According to Adam Smith,A country should specialize in the production of a good when it has _____.

Variety of goods that a country can produce is limited by the size of the market in industries where economies of scale are important.

Which of the following is a major disadvantage of the product life-cycle theory introduced by Vernon?

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

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

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

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

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

Wal-Mart makes bulk purchases from its vendors and hence it is able to get better deals than its competitors.This allows Wal-Mart to offer greater discounts to its customers.In this case,Wal-Mart benefits from _____.

Identify the theory that supports the view that in some cases countries export for the reason that the world market can support only a limited number of firms.

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

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

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