Question 1

What will happen,according to Paul Samuelson's critique,if a rich country enters into a free trade agreement with a poor country?

Accepted Answer

A)  Both the countries will incur losses due to the exchanges between them. 
B)  The productivity of the poor country will decline rapidly. 
C)  The poor country will rapidly improve its productivity. 
D)  Both the countries will garner benefits from the exchanges between them. 
A)  Both the countries will incur losses due to the exchanges between them. 
B)  The productivity of the poor country will decline rapidly. 
C)  The poor country will rapidly improve its productivity. 
D)  Both the countries will garner benefits from the exchanges between them.

Question 2

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 3

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 4

Heckscher-Ohlin theory stresses that comparative advantage arises from differences in productivity.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following theories emphasizes the interplay between the proportions in which the factors of production are available in different countries and the proportions in which they are needed for producing particular goods?

Accepted Answer

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

Question 6

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 7

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 8

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

Accepted Answer

A) True 
 B)False

Question 9

According to Ricardo's theory of comparative advantage,countries should produce all the products for which they have an absolute advantage.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

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 13

Mercantilist doctrine advocates unrestricted free trade between countries.

Accepted Answer

A) True 
 B)False

Question 14

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 15

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

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is one of the four attributes present in Porter's diamond?

Accepted Answer

A)  Economies of scale 
B)  Factor endowments 
C)  Structural innovation 
D)  Procedural innovation 
A)  Economies of scale 
B)  Factor endowments 
C)  Structural innovation 
D)  Procedural innovation

Question 17

Free trade 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) True 
 B)False

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

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 20

Country A exports electronic goods from Country B although there are no underlying differences in factor endowments between the two countries.Which of the following theories explains this anomaly?

Accepted Answer

A)  Comparative advantage theory 
B)  New trade theory 
C)  Ricardo's theory 
D)  Smith's theory 
A)  Comparative advantage theory 
B)  New trade theory 
C)  Ricardo's theory 
D)  Smith's theory

What will happen,according to Paul Samuelson's critique,if a rich country enters into a free trade agreement with a poor country?

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

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

Heckscher-Ohlin theory stresses that comparative advantage arises from differences in productivity.

Which of the following theories emphasizes the interplay between the proportions in which the factors of production are available in different countries and the proportions in which they are needed for producing particular goods?

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

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.

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

According to Ricardo's theory of comparative advantage,countries should produce all the products for which they have an absolute advantage.

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

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

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?

Mercantilist doctrine advocates unrestricted free trade between countries.

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?

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

Which of the following is one of the four attributes present in Porter's diamond?

Free trade refers to a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country.

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.

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

Country A exports electronic goods from Country B although there are no underlying differences in factor endowments between the two countries.Which of the following theories explains this anomaly?

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

What will happen,according to Paul Samuelson's critique,if a rich country enters into a free trade agreement with a poor country?

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

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

Heckscher-Ohlin theory stresses that comparative advantage arises from differences in productivity.

Which of the following theories emphasizes the interplay between the proportions in which the factors of production are available in different countries and the proportions in which they are needed for producing particular goods?

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

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.

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

According to Ricardo's theory of comparative advantage,countries should produce all the products for which they have an absolute advantage.

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

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

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?

Mercantilist doctrine advocates unrestricted free trade between countries.

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?

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

Which of the following is one of the four attributes present in Porter's diamond?

Free trade refers to a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country.

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.

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

Country A exports electronic goods from Country B although there are no underlying differences in factor endowments between the two countries.Which of the following theories explains this anomaly?

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