Question 1

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

Accepted Answer

Viewed from an Asian or European perspec...

Question 2

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 3

Diminishing returns to specialization occurs when _____.

Accepted Answer

A)   each additional unit is produced with lesser number of laborers
B)   a nation's gross domestic product declines for a few years
C)   production possibility frontier appears as a rectangle
D)   more units of resources are required to produce each additional unitE) None of the above
F) A) and B)

Question 4

Explain how the rivalry within an industry affects international competence.

Accepted Answer

Porter's second point is that there is a...

Question 5

A country has an absolute advantage in the production of a product when it _____.

Accepted Answer

A)   has the capability to produce the product within its boundaries
B)   is more efficient than any other country in producing it
C)   has the largest domestic demand for the product
D)   has access to the raw materials needed to produce the productE) All of the above
F) B) and C)

Question 6

The theory of comparative advantage suggests that trade is a positive-sum game in which all countries that participate realize economic gains.

Accepted Answer

A) True 
 B)False

Question 7

Explain how the theories of trade differ in terms of their support to governmental intervention.

Accepted Answer

The theories of Smith,Ricardo,and Hecksc...

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Country X,a poor country,invents a revolutionary electronic product.The country markets this new product in other poor countries to garner large profits.This occurrence is against the idea of _____.

Accepted Answer

A)   product life-cycle theory
B)   Ricardo's theory
C)   theory of absolute advantage
D)   theory of comparative advantageE) A) and C)
F) B) and C)

Question 10

According to Paul Samuelson's critique,a poor country will rapidly improve its productivity if a rich country enters into a free trade agreement with it.

Accepted Answer

A) True 
 B)False

Question 11

Resources always move easily from one economic activity to another.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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 theoryE) A) and B)
F) None of the above

Question 14

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

Accepted Answer

The four factors are: (1)Factor endowmen...

Question 15

What are the assumptions that we make when we discuss a simple Ricardian model to support free trade?

Accepted Answer

1.We have assumed a simple world in whic...

Question 16

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 returnsE) A) and D)
F) C) and D)

Question 17

Which of the following balance-of-payment accounts records one-time changes in the stock of assets?

Accepted Answer

A)   Capital account
B)   Current account
C)   Financial account
D)   Monetary accountE) A) and B)
F) A) and C)

Question 18

Briefly explain Vernon's product life-cycle theory.

Accepted Answer

Vernon's theory was based on the observa...

Question 19

Explain Ricardo's theory of comparative advantage.

Accepted Answer

According to Ricardo's theory of compara...

Question 20

A country has an absolute advantage in the production of a product when it is more efficient than any other country in producing it.

Accepted Answer

A) True 
 B)False

Exam 6: International Trade Theory

The theory of comparative advantage suggests that trade is a positive-sum game in which all countries that participate realize economic gains.

Correct AnswerverifiedShow Answer

Explain Ricardo's theory of comparative advantage.

Correct AnswerverifiedAccording to Ricardo's theory of compara...View AnswerShow Answer

Country X,a poor country,invents a revolutionary electronic product.The country markets this new product in other poor countries to garner large profits.This occurrence is against the idea of _____.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Resources always move easily from one economic activity to another.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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 _____.

Correct AnswerverifiedShow Answer

Explain how the theories of trade differ in terms of their support to governmental intervention.

Correct AnswerverifiedThe theories of Smith,Ricardo,and Hecksc...View AnswerShow Answer

A country has an absolute advantage in the production of a product when it _____.

Correct AnswerverifiedShow Answer

What are the assumptions that we make when we discuss a simple Ricardian model to support free trade?

Correct Answerverified1.We have assumed a simple world in whic...View AnswerShow Answer

A country has an absolute advantage in the production of a product when it is more efficient than any other country in producing it.

Correct AnswerverifiedShow Answer

Which of the following balance-of-payment accounts records one-time changes in the stock of assets?

Correct AnswerverifiedShow Answer

Explain how the rivalry within an industry affects international competence.

Correct AnswerverifiedPorter's second point is that there is a...View AnswerShow Answer

According to Paul Samuelson's critique,a poor country will rapidly improve its productivity if a rich country enters into a free trade agreement with it.

Correct AnswerverifiedShow Answer

Diminishing returns to specialization occurs when _____.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedThe four factors are: (1)Factor endowmen...View AnswerShow Answer

Briefly explain Vernon's product life-cycle theory.

Correct AnswerverifiedVernon's theory was based on the observa...View AnswerShow Answer

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

Correct AnswerverifiedViewed from an Asian or European perspec...View AnswerShow Answer

Correct Answer
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Correct Answer
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According to Ricardo's theory of compara...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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The theories of Smith,Ricardo,and Hecksc...
View Answer

Correct Answer
verified

Correct Answer
verified
1.We have assumed a simple world in whic...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Porter's second point is that there is a...
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Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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The four factors are: (1)Factor endowmen...
View Answer

Correct Answer
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Vernon's theory was based on the observa...
View Answer

Correct Answer
verified
Viewed from an Asian or European perspec...
View Answer