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Exam 6: International Trade Theory

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Question 31

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The principle of mercantilism views trade as a positive-sum game.

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Question 32

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A capital intensive country exports products that are capital intensive.This is an example of Leontief Paradox.

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Question 33

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Identify the theory that supports the view that in some cases countries export for the reason that the world market can support only a limited number of firms.

According to Ricardo's theory of comparative advantage,countries should produce all the products for which they have an absolute advantage.

What will happen,according to Paul Samuelson's critique,if a rich country enters into a free trade agreement with a poor country?

According to the new trade theory,firms that establish a first-mover advantage with regard to the production of a particular new product may subsequently dominate global trade in that product.

Which of the following terms refers to the unit cost reductions associated with large sized outputs?

Which of the following theories emphasizes the interplay between the proportions in which the factors of production are available in different countries and the proportions in which they are needed for producing particular goods?

Which of the following refers to a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country?

Mercantilist doctrine advocates unrestricted free trade between countries.

The product life-cycle theory argues that a large proportion of the world's new products had been developed by U.S.firms.

Textile industry in a nation is characterized by vigorous domestic rivalry.Which of the following observations of this nation's international competency is most likely to be true?

Which of the following theories suggests that first mover advantage is significant in the export of a good?

Heckscher-Ohlin theory stresses that comparative advantage arises from differences in productivity.

Free trade refers to a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country.

David Ricardo's theory of comparative advantage explains global trade in terms of the _____.

Which of the following is one of the four attributes present in Porter's diamond?

Diminishing returns show that it is feasible for a country to specialize to the degree suggested by the simple Ricardian model.

Simple model of free trade assumed away transportation costs between countries.

Country A exports electronic goods from Country B although there are no underlying differences in factor endowments between the two countries.Which of the following theories explains this anomaly?