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| 1 | |
_______ occurs when a government does not attempt to influence through quotas or duties what its citizens can buy from another country or what they can produce and sell to another. |
| | A) | Mercantilism |
| | B) | Zero-sum game |
| | C) | Free trade |
| | D) | Absolute advantage |
| | E) | The Leontief Paradox |
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| 2 | |
Lawyers representing the Chinese crawfish industry claimed that __________ were the reason for low prices. |
| | A) | higher labour costs |
| | B) | lower production costs |
| | C) | lower taxes |
| | D) | lower shipping costs |
| | E) | little competition |
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| 3 | |
The _______ theory of international trade believes it is in a country's best interest to export more than it imports. |
| | A) | free trade |
| | B) | comparative advantage |
| | C) | Heckscher-Ohlin Theory |
| | D) | absolute advantage |
| | E) | mercantilism |
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| 4 | |
A situation in which a gain by one country results in a loss by another refers to: |
| | A) | zero-sum game. |
| | B) | free trade. |
| | C) | comparative advantage. |
| | D) | positive-sum game. |
| | E) | absolute advantage. |
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| 5 | |
A country is said to have a(n) _______ when it is more efficient at producing a product than any other country. |
| | A) | comparative advantage |
| | B) | mixed advantage |
| | C) | absolute advantage |
| | D) | positive-sum game |
| | E) | zero-sum game |
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| 6 | |
What are situations in which a country specializes in producing the goods it produces most efficiently and buys the products it produces less efficiently from other countries, even if it could produce the goods more efficiently itself called? |
| | A) | Absolute advantage |
| | B) | Mercantilism |
| | C) | Free trade |
| | D) | Comparative advantage |
| | E) | Restricted trade |
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| 7 | |
Differences in labour productivity between nations underlie the notion of: |
| | A) | mercantilism. |
| | B) | comparative advantage. |
| | C) | Heckscher-Ohlin theory. |
| | D) | restricted trade theory. |
| | E) | hybrid market economy. |
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| 8 | |
In the explanation of comparative advantage using Ghana and South Korea, the result of trade is that: |
| | A) | consumers in each country have slightly less product available |
| | B) | manufacturers have uncompetitive prices |
| | C) | the government makes more money taxing businesses |
| | D) | consumers in both nations can consumer more of both goods |
| | E) | consumers in both nations have only one source of goods |
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| 9 | |
Which of these is the basic message of the theory of comparative advantage? |
| | A) | Potential world production is greater with unrestricted free trade than it is with restricted trade. |
| | B) | Consumers in all nations can consume more if there are restrictions on trade where inefficiencies exist. |
| | C) | Countries that lack an absolute advantage in the production of any good should be from trade. |
| | D) | Trade is a zero-sum game. |
| | E) | None of these. |
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| 10 | |
Life Savers moved from Michigan to Canada, mainly because: |
| | A) | they can buy sugar at a lower world market price in Canada. |
| | B) | Canadian corporate taxes are lower. |
| | C) | the Canadian dollar is cheaper. |
| | D) | Canada has better workers in the candy industry. |
| | E) | of government incentives. |
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| 11 | |
Which theory argued that comparative advantage arises from differences in national factor endowments? |
| | A) | Mercantilism |
| | B) | Comparative advantage |
| | C) | Heckscher-Ohlin theory |
| | D) | Restricted trade theory |
| | E) | Hybrid market economy |
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| 12 | |
This theory has been one of the most influential theories in international economics. Most economists prefer the _______ theory to Ricardo’s theory because it makes fewer simplifying assumptions. |
| | A) | Heckscher-Ohlin |
| | B) | Michael Porter |
| | C) | Adam Smith |
| | D) | David Hume |
| | E) | Raymond Vernon |
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| 13 | |
Who proposed the product life-cycle theory? |
| | A) | Michael Porter |
| | B) | Adam Smith |
| | C) | David Ricardo |
| | D) | Raymond Vernon |
| | E) | David Hume |
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| 14 | |
The product becomes _______, according to Vernon, as the market in the United States and other advanced nations matures. |
| | A) | more expensive |
| | B) | more standardized |
| | C) | totally obsolete |
| | D) | new and improved |
| | E) | more differentiated |
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| 15 | |
New trade theorists stress the role of ______ in giving a firm first-mover advantages. |
| | A) | luck, restricted trade, and innovation |
| | B) | innovation, luck, and entrepreneurship |
| | C) | entrepreneurship, restricted trade, and luck |
| | D) | innovation, restricted trade, and entrepreneurship |
| | E) | restricted trade, government intervention, and luck |
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| 16 | |
According to Porter's diamond, all of these attributes, except _______, are determinants of national competitive advantage. |
| | A) | government intervention |
| | B) | firm strategy structure and rivalry |
| | C) | demand conditions |
| | D) | factor endowments |
| | E) | relating and supporting industries |
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| 17 | |
Which of these, according to Porter, is a part of advanced factors? |
| | A) | Natural resources |
| | B) | Location |
| | C) | Demographics |
| | D) | Communications infrastructure |
| | E) | Climate |
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| 18 | |
_____ advantages are economic and strategic advantages that accrue to early entrants into an industry. |
| | A) | Mercantile |
| | B) | Free-trade |
| | C) | First-mover |
| | D) | Absolute |
| | E) | Comparative |
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