Question 1

What might result in the absence of trade, if certain products have small national markets?

Accepted Answer

A)   The variety of products available to consumers increases.
B)   Limited demand for such products leads to non-realization of economies of scale.
C)   Each nation will specialize in producing a narrower range of products than it would in the presence of trade.
D)   At low volumes of production, unit costs and prices would be lowered.
E)   The first movers in an industry may get a lock on the world market that discourages subsequent entry.F) D) and E)
G) B) and C)

Question 2

Which statement reflects a pervasive finding of Porter's study?

Accepted Answer

A)   Successful industries within a country tend to be grouped into clusters of related industries.
B)   Trade increases the specialization of production within an industry.
C)   The pattern of trade we observe in the world economy may be the result of first-mover advantages.
D)   Purchasing power parity of a country determines its demand conditions.
E)   Differences in technology may lead to differences in productivity, which in turn, drives international trade patterns.F) C) and E)
G) B) and D)

Question 3

One of the central beliefs of mercantilism is that

Accepted Answer

A)   a country's government should intervene to achieve a surplus in the balance of trade.
B)   a large volume of trade is essential regardless of whether it comes from imports or exports.
C)   trade is a positive-sum game in which all countries benefit from trading with each other.
D)   a country that has an absolute advantage in the production of all goods derives no benefits from international trade.
E)   potential world production is greater with unrestricted free trade than it is with restricted trade.F) None of the above
G) B) and D)

Question 4

Porter's theory has been subjected to detailed empirical testing and it is proven that it accurately predicts international trade patterns.

Accepted Answer

A) True 
 B)False

Question 5

The difference between Ricardo's theory and the Heckscher-Ohlin theory is that the Heckscher-Ohlin theory

Accepted Answer

A)   makes more simplifying assumptions.
B)   cannot be subjected to empirical tests.
C)   actually predicts trade patterns with greater accuracy.
D)   argues that the pattern of international trade is determined by differences in national factor endowments.
E)   suggests that trade is a positive-sum game in which all countries that participate realize economic gains.F) A) and D)
G) A) and C)

Exam 6: International Trade Theory

The difference between Ricardo's theory and the Heckscher-Ohlin theory is that the Heckscher-Ohlin theory

Correct Answer
verified

One of the central beliefs of mercantilism is that

Correct Answer
verified

What might result in the absence of trade, if certain products have small national markets?

Correct Answer
verified

Porter's theory has been subjected to detailed empirical testing and it is proven that it accurately predicts international trade patterns.

Correct Answer
verified

Which statement reflects a pervasive finding of Porter's study?

Correct Answer
verified

Exam 6: International Trade Theory

The difference between Ricardo's theory and the Heckscher-Ohlin theory is that the Heckscher-Ohlin theory

Correct AnswerverifiedShow Answer

One of the central beliefs of mercantilism is that

Correct AnswerverifiedShow Answer

What might result in the absence of trade, if certain products have small national markets?

Correct AnswerverifiedShow Answer

Porter's theory has been subjected to detailed empirical testing and it is proven that it accurately predicts international trade patterns.

Correct AnswerverifiedShow Answer

Which statement reflects a pervasive finding of Porter's study?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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