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1 | |
According to Smith, Ricardo, and Hecksher-Ohlin |
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| | A) | consumers should protect jobs at home by buying locally made products whenever possible |
| | B) | import controls can be beneficial in certain situations |
| | C) | it can be beneficial for a nation to engage in trade even for products the country can produce itself |
| | D) | the U.S. should import commercial jet aircraft |
| | E) | labor productivity does not factor into the pattern of international trade |
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2 | |
A major flaw in ____________ is that viewed trade as a zero-sum. |
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| | A) | the theory of absolute advantage |
| | B) | the theory of comparative advantage |
| | C) | the new trade theory |
| | D) | mercantilism |
| | E) | the Hecksher-Ohlin theory |
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3 | |
When a country is more efficient than any other country at producing a particular product, that country is said to have |
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| | A) | unrestricted trade |
| | B) | production efficiency |
| | C) | an absolute advantage |
| | D) | an efficiency advantage |
| | E) | a comparative advantage |
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4 | |
The _________ predicts that a nation will export goods that make intensive use of factors of production that are locally abundant, while importing goods that make use of factors that are locally scare. |
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| | A) | mercantilist philosophy |
| | B) | theory of absolute advantage |
| | C) | theory of comparative advantage |
| | D) | Hecksher-Ohlin theory |
| | E) | Leontief Paradox |
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5 | |
According to the product life cycle, as the market for a product matures all of the following occur except |
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| | A) | price becomes the main competitive weapon |
| | B) | cost considerations start to play a greater role |
| | C) | the product becomes more differentiated |
| | D) | production may shift to a developing country |
| | E) | the U.S. will lose its advantage |
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6 | |
In the ______ stage of the product life cycle, the U.S. may import the product. |
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| | A) | new product |
| | B) | maturing |
| | C) | standardized |
| | D) | first mover |
| | E) | consumption |
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7 | |
The role of economies of scale is important in |
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| | A) | mercantilism |
| | B) | the theory of absolute advantage |
| | C) | the theory of comparative advantage |
| | D) | the product life cycle |
| | E) | new trade theory |
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8 | |
According to ______________ first movers in an industry may be able to close a market to other potential entrants. |
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| | A) | new trade theory |
| | B) | mercantilism |
| | C) | the theory of absolute advantage |
| | D) | the theory of comparative advantage |
| | E) | the product life cycle |
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9 | |
_________ suggests that demand conditions, factor endowments, firm strategy, structure, and rivalry, and related and supporting industries determine a nation's advantage. |
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| | A) | new trade theory |
| | B) | strategic trade policy |
| | C) | the Hecksher-Ohlin theory |
| | D) | Porter's Diamond of competitive advantage |
| | E) | David Ricardo |
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10 | |
In addition to the four points on the diamond, Porter suggests that ________ and ________ also play a role in determining a nation's competitive advantage. |
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| | A) | the government and the general public |
| | B) | lenders and unions |
| | C) | stakeholders and banks |
| | D) | chance and the government |
| | E) | unions and banks |
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11 | |
When there are no barriers to the free flow of goods and services between nations, free trade exists. |
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| | A) | True |
| | B) | False |
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12 | |
According to Smith, government policy should determine a country's trade pattern. |
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| | A) | True |
| | B) | False |
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13 | |
Both Michael Porter and Paul Krugman agree with Smith, Ricardo, and Hecksher-Ohlin that unrestricted free trade is most beneficial to a nation. |
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| | A) | True |
| | B) | False |
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14 | |
The notion of a zero-sum game in mercantilism refers to the benefits that both nations receive as a result of free trade. |
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| | A) | True |
| | B) | False |
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15 | |
According to David Ricardo, if a nation has an absolute advantage in the production of all goods, the country should not engage in international trade. |
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| | A) | True |
| | B) | False |
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16 | |
The Hecksher-Ohlin theory is considered to be an excellent predictor of real-world trade patterns. |
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| | A) | True |
| | B) | False |
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17 | |
The cost advantages associated with large-scale production are called economies of scale. |
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| | A) | True |
| | B) | False |
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18 | |
Chance and government play a role in Porter's Diamond of Competitive Advantage. |
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| | A) | True |
| | B) | False |
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19 | |
The Diamond of Competitive Advantage suggests that when consumers pressure firms to produce high quality, innovative products, competitive advantage is increased. |
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| | A) | True |
| | B) | False |
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20 | |
According to Porter, vigorous domestic rivalry will create a competitive advantage in an industry. |
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| | A) | True |
| | B) | False |