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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 | |
McCain Foods of Canada complained to CBSA that U.S. producers were dumping pizzas in Canada, this means |
| | A) | Canadian producers were selling pizzas to Canada for a price cheaper than in their home U.S. market |
| | B) | U.S. producers were selling pizzas to Canada for a price cheaper than in their home U.S. market |
| | C) | Canadian producers were selling pizzas to Canada for a price cheaper than in their home Canadian market |
| | D) | U.S. producers were selling pizzas to Canada for a price more expensive than in their home U.S. market |
| | E) | U.S. producers were selling pizzas to Canada at a volume amount greater than in their home U.S. market |
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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 is it called when a country specializes in producing the goods it produces most efficiently and buys the products it produces less efficiently, even if it could produce the goods more efficiently? |
| | 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 | |
Economies of Scale is a term associated with |
| | A) | Customer savings associated with large scale output |
| | B) | Unit cost reductions associated with minimal scale output |
| | C) | Unit cost reductions associated with large scale output |
| | D) | Unit cost increases associated with large scale output |
| | E) | Customer savings associated with small scale output |
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| 16 | |
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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| 17 | |
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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| 18 | |
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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| 19 | |
_____ 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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