QUESTION Which of the following components of Porter’s diamond is particularly important in shaping the attributes of domestically made products and in creating pressures for innovation and quality? A. Basic factor endowments B. Advanced factor endowments C. Firm strategy D. Demand conditions E. Supporting industries ANSWER D
QUESTION Which of the following is true of factor endowments according to Porter? A. Basic factors, unlike advanced factors, are the most significant for competitive advantage. B. Basic factors can be upgraded by nations, while advanced factors are endowed by nature. C. The initial advantage provided by advanced factors is extended by investment in basic […]
QUESTION Which of the following factor endowments would be classified as a basic factor by Michael Porter? A. Communication infrastructure B. Research facilities C. Natural resources D. Skilled labor E. Technological know-how ANSWER C
QUESTION Porter argues that a nation’s firms gain competitive advantage if their domestic consumers are: A. sophisticated and demanding. B. price insensitive and trusting. C. accommodating and flexible. D. nationalistic and protective of their domestic industries. E. biased toward foreign products. ANSWER A
QUESTION Porter, in his diamond model, suggested that there is a strong association between which of the following and the creation and persistence of competitive advantage in an industry? A. Trade barriers B. Vigorous domestic rivalry C. Purchasing power parity D. The availability of a captive market E. First-mover advantages ANSWER B
QUESTION If a company were to draw from the ideas proposed in the various theories of international trade, from a profit perspective, how would it go about selecting locations for its businesses? A. It would concentrate its productive activities mostly in developing countries. B. It would concentrate its productive activities in its home country. C. […]
QUESTION One of the suggestions of the new trade theory is that: A. differences in technology leads to differences in productivity, which in turn, drives international trade patterns. B. nations may benefit from trade irrespective of resource endowments or technology. C. the demand for most new products tends to be based on nonprice factors. D. […]
QUESTION Which of the following was a pervasive finding of Porter’s study? 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. […]
QUESTION Which of the following is an empirically supported prediction of the new trade theory? A. Trade increases the specialization of production within an industry. B. Nations benefit from trade only when they differ in factor endowments. C. Government intervention and strategic trade policies are more likely to harm international trade than is free trade. […]
QUESTION Which of the following helps a firm to preempt available demand, gain cost advantages related to volume, and build an enduring brand ahead of later competitors? A. Monopolistic practices B. Comparative advantages C. Absolute advantages D. First-mover advantages E. Mercantilism ANSWER D
