Question 1

Porter noted the predominance of engineers in top management at German and Japanese firms and a predominance of people with finance backgrounds leading many U.S.firms.He argued that the dominance of finance in U.S.firms led to a relative loss of U.S.competitiveness in some engineering-based industries.Thus,Porter illustrates how different nations _____,which are instrumental in their building national competitive advantage.

Accepted Answer

A)  upgrade their basic factors
B)  have different trade policies
C)  are characterized by different management ideologies
D)  have varying levels of government interferenceE) A) and B)
F) All of the above

Question 2

One of the key assumptions of the Heckscher-Ohlin theory is that:

Accepted Answer

A)  technologies are the same across countries.
B)  differences in the prices of resources in different countries do not exist.
C)  resources can move freely from the production of one good to another within a country.
D)  trade has no effect on income distribution in a country.E) All of the above
F) B) and C)

Question 3

The _____ theory began to emerge in the 1970s when some economists pointed out that the ability of firms to attain economies of scale might have important implications for international trade.

Accepted Answer

A)  balanced trade
B)  Heckscher-Ohlin
C)  new trade
D)  product life-cycleE) C) and D)
F) A) and C)

Question 4

Viewed from an Asian or European perspective,Vernon's argument that most new products are developed and introduced in the United States seems ethnocentric.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following best describes the essential task of Porter's 1990 study of national competitive advantage?

Accepted Answer

A)  How do nations leverage their resources efficiently to gain absolute advantage?
B)  Why does a nation achieve international success in a particular industry?
C)  How do countries gain first-mover advantages?
D)  What are the international trade patterns in evidence in the modern world?E) None of the above
F) A) and D)

Question 6

According to Porter,the characteristics of _____ are particularly important in shaping the attributes of domestically made products and in creating pressures for innovation and quality.

Accepted Answer

A)  international customers
B)  the U.S.market
C)  foreign investment
D)  home demandE) A) and D)
F) A) and C)

Question 7

Preempting the available demand,gaining cost advantages related to volume,building an enduring brand ahead of later competitors,and,consequently,establishing a long-term sustainable competitive advantage,are all examples of:

Accepted Answer

A)  monopolistic practices.
B)  comparative advantages.
C)  absolute advantages.
D)  first-mover advantages.E) C) and D)
F) A) and D)

Question 8

According to the product life-cycle theory,the high cost of U.S.labor gave U.S.firms an incentive to:

Accepted Answer

A)  lower costs of services to offset a fall in demand.
B)  develop cost-saving process innovations.
C)  invite foreign direct investment in domestic industries.
D)  embrace and promote open market capitalism.E) C) and D)
F) B) and C)

Question 9

Vernon theorizes that as the market in the U.S.and other advanced nations matures,the product becomes more standardized and price becomes:

Accepted Answer

A)  governmentally regulated.
B)  higher.
C)  unimportant.
D)  the main competitive weapon.E) A) and C)
F) A) and D)

Question 10

The economic and strategic advantages that accrue to early entrants in an industry are called:

Accepted Answer

A)  first-mover advantages.
B)  comparative advantages.
C)  pioneering advantages.
D)  early-bird advantages.E) All of the above
F) B) and C)

Question 11

Who argued that successful industries within a country tend to be grouped into "clusters" of related industries?

Accepted Answer

A)  Michael Porter
B)  Raymond Vernon
C)  David Ricardo
D)  Eli HeckscherE) All of the above
F) None of the above

Question 12

Raymond Vernon's theory of the product life-cycle was based on the observation that for most of the 20th century,a very large proportion of the world's new products were developed by foreign nations and sold first in the U.S.market.

Accepted Answer

A) True 
 B)False

Question 13

82.One of the drawbacks of the Heckscher-Ohlin theory,even though it makes sound theoretical sense,is that:

Accepted Answer

A)  it does not explain the differences in national factor endowments.
B)  it argues that comparative advantage arises from differences in the countries' labor productivity.
C)  it lacks common sense appeal.
D)  it is a relatively poor predictor of real-world international trade patterns.E) None of the above
F) B) and C)

Question 14

Discuss Paul Samuelson's critique of free trade,where he argued that in some circumstances,dynamic gains can lead to an outcome that is not so beneficial.

Accepted Answer

Paul Samuelson's critique looks at what ...

Question 15

Neo-mercantilists equate _____ with economic power and economic power with
_____.

Accepted Answer

A)  international trade;corruption
B)  political power;balance-of-trade surplus
C)  imports;regional dominance
D)  absolute advantage;trade monopolyE) A) and D)
F) B) and C)

Question 16

Which of the following theorists published the results of an intensive research effort that attempted to determine why some nations succeed and others fail in international competition,in addition to,proposing an explanation in the form of a "diamond" of four national attributes?

Accepted Answer

A)  Alfred Chandler
B)  Raymond Vernon
C)  Andrew Warner
D)  Michael PorterE) A) and C)
F) None of the above

Question 17

According to Adam Smith's theory of absolute advantage,a country that has an absolute advantage in the production of all goods:

Accepted Answer

A)  enjoys the greatest benefits of international trade.
B)  might go on to become the dominant country in the production of those goods.
C)  will grow to be the biggest economic power.
D)  might derive no benefits from international trade.E) B) and C)
F) A) and C)

Question 18

Because of substantial economies of scale,the new trade theory argues that trade can:

Accepted Answer

A)  increase the variety of goods available to consumers.
B)  increase the average costs of goods.
C)  enable the global market to support a wide range of enterprises.
D)  inhibit first-mover advantages in all products.E) C) and D)
F) A) and B)

Question 19

Porter's theory counts demand conditions as one of the four broad attributes of a nation,shaping the environment in which local firms compete.Briefly explain how it is so and mention at least two examples to support the explanation.

Accepted Answer

Porter emphasizes the role home demand p...

Question 20

One of the implications of the new trade theory is that:

Accepted Answer

A)  it predicts the U.S.dominating the world market for consumer goods.
B)  nations may benefit from trade irrespective of resource endowments or technology.
C)  U.S.switches from being an importer of products to an exporter owing to lowering of labor costs.
D)  it accurately predicts the evolution of globally dispersed production.E) C) and D)
F) A) and B)

Exam 5: International Trade Theory

Raymond Vernon's theory of the product life-cycle was based on the observation that for most of the 20th century,a very large proportion of the world's new products were developed by foreign nations and sold first in the U.S.market.

Correct Answer
verified

The _____ theory began to emerge in the 1970s when some economists pointed out that the ability of firms to attain economies of scale might have important implications for international trade.

Correct Answer
verified

Which of the following best describes the essential task of Porter's 1990 study of national competitive advantage?

Correct Answer
verified

The economic and strategic advantages that accrue to early entrants in an industry are called:

Correct Answer
verified

Correct Answer
verified

82.One of the drawbacks of the Heckscher-Ohlin theory,even though it makes sound theoretical sense,is that:

Correct Answer
verified

Viewed from an Asian or European perspective,Vernon's argument that most new products are developed and introduced in the United States seems ethnocentric.

Correct Answer
verified

Neo-mercantilists equate _ with economic power and economic power with _.

Correct Answer
verified

According to the product life-cycle theory,the high cost of U.S.labor gave U.S.firms an incentive to:

Correct Answer
verified

Which of the following theorists published the results of an intensive research effort that attempted to determine why some nations succeed and others fail in international competition,in addition to,proposing an explanation in the form of a "diamond" of four national attributes?

Correct Answer
verified

Discuss Paul Samuelson's critique of free trade,where he argued that in some circumstances,dynamic gains can lead to an outcome that is not so beneficial.

Correct Answer
verified
Paul Samuelson's critique looks at what ...
View Answer

One of the implications of the new trade theory is that:

Correct Answer
verified

Preempting the available demand,gaining cost advantages related to volume,building an enduring brand ahead of later competitors,and,consequently,establishing a long-term sustainable competitive advantage,are all examples of:

Correct Answer
verified

Because of substantial economies of scale,the new trade theory argues that trade can:

Correct Answer
verified

Who argued that successful industries within a country tend to be grouped into "clusters" of related industries?

Correct Answer
verified

According to Porter,the characteristics of _____ are particularly important in shaping the attributes of domestically made products and in creating pressures for innovation and quality.

Correct Answer
verified

Vernon theorizes that as the market in the U.S.and other advanced nations matures,the product becomes more standardized and price becomes:

Correct Answer
verified

One of the key assumptions of the Heckscher-Ohlin theory is that:

Correct Answer
verified

Porter's theory counts demand conditions as one of the four broad attributes of a nation,shaping the environment in which local firms compete.Briefly explain how it is so and mention at least two examples to support the explanation.

Correct Answer
verified
Porter emphasizes the role home demand p...
View Answer

According to Adam Smith's theory of absolute advantage,a country that has an absolute advantage in the production of all goods:

Correct Answer
verified

Exam 5: International Trade Theory

Raymond Vernon's theory of the product life-cycle was based on the observation that for most of the 20th century,a very large proportion of the world's new products were developed by foreign nations and sold first in the U.S.market.

Correct AnswerverifiedShow Answer

The _____ theory began to emerge in the 1970s when some economists pointed out that the ability of firms to attain economies of scale might have important implications for international trade.

Correct AnswerverifiedShow Answer

Which of the following best describes the essential task of Porter's 1990 study of national competitive advantage?

Correct AnswerverifiedShow Answer

The economic and strategic advantages that accrue to early entrants in an industry are called:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

82.One of the drawbacks of the Heckscher-Ohlin theory,even though it makes sound theoretical sense,is that:

Correct AnswerverifiedShow Answer

Viewed from an Asian or European perspective,Vernon's argument that most new products are developed and introduced in the United States seems ethnocentric.

Correct AnswerverifiedShow Answer

Neo-mercantilists equate _____ with economic power and economic power with _____.

Correct AnswerverifiedShow Answer

According to the product life-cycle theory,the high cost of U.S.labor gave U.S.firms an incentive to:

Correct AnswerverifiedShow Answer

Which of the following theorists published the results of an intensive research effort that attempted to determine why some nations succeed and others fail in international competition,in addition to,proposing an explanation in the form of a "diamond" of four national attributes?

Correct AnswerverifiedShow Answer

Discuss Paul Samuelson's critique of free trade,where he argued that in some circumstances,dynamic gains can lead to an outcome that is not so beneficial.

Correct AnswerverifiedPaul Samuelson's critique looks at what ...View AnswerShow Answer

One of the implications of the new trade theory is that:

Correct AnswerverifiedShow Answer

Preempting the available demand,gaining cost advantages related to volume,building an enduring brand ahead of later competitors,and,consequently,establishing a long-term sustainable competitive advantage,are all examples of:

Correct AnswerverifiedShow Answer

Because of substantial economies of scale,the new trade theory argues that trade can:

Correct AnswerverifiedShow Answer

Who argued that successful industries within a country tend to be grouped into "clusters" of related industries?

Correct AnswerverifiedShow Answer

According to Porter,the characteristics of _____ are particularly important in shaping the attributes of domestically made products and in creating pressures for innovation and quality.

Correct AnswerverifiedShow Answer

Vernon theorizes that as the market in the U.S.and other advanced nations matures,the product becomes more standardized and price becomes:

Correct AnswerverifiedShow Answer

One of the key assumptions of the Heckscher-Ohlin theory is that:

Correct AnswerverifiedShow Answer

Porter's theory counts demand conditions as one of the four broad attributes of a nation,shaping the environment in which local firms compete.Briefly explain how it is so and mention at least two examples to support the explanation.

Correct AnswerverifiedPorter emphasizes the role home demand p...View AnswerShow Answer

According to Adam Smith's theory of absolute advantage,a country that has an absolute advantage in the production of all goods:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Neo-mercantilists equate _ with economic power and economic power with _.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Paul Samuelson's critique looks at what ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Porter emphasizes the role home demand p...
View Answer

Correct Answer
verified