QUESTION The new trade theory diverts from its advocacy of free trade by suggesting that: A. the price of a new product increases along with the increase in the popularity of the product. B. nations benefit from trade even in the absence of resource endowments and technology. C. there is an economic rationale for a […]
QUESTION Which of the following is one of the four factors included in Porter’s diamond? A. Purchasing power parity B. Gross national income C. Economies of scale D. Firm strategy, structure, and rivalry E. Gross domestic product ANSWER D
QUESTION According to Porter’s diamond, what are factor endowments? A. The position of a nation regarding the components of production necessary to compete in a given industry B. The presence or absence of related industries that are internationally competitive C. The conditions governing how companies are created, organized, and managed and the nature of domestic […]
QUESTION Which of the following is true of the four attributes that make Porter’s diamond? A. Absence of any single attribute does not impact effectiveness of the diamond. B. The effect of one attribute is contingent on the state of others. C. The diamond is not a mutually reinforcing system. D. Chance events, such as […]
QUESTION Which of the following formed the crux of Porter’s study of national competitive advantage? A. Identifying the various stages of the life cycle of a product B. Determining why a country achieves international success in a particular industry C. Determining how trade barriers affect the prices of products in the international market D. Determining […]
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 Vernon argues that early in the life cycle of a typical new product, while demand is starting to grow rapidly in the United States, demand in other advanced countries: A. remains limited to high-income groups. B. necessitates production of that product in those countries. C. necessitates outsourcing of production to low-cost locations. D. raises […]
QUESTION According to the new trade theory: A. the ability to capture first-mover advantages is restricted in a world that disallows trade. B. differences in labor productivity between nations underlie the notion of comparative advantage. C. a country may predominate in the export of a good because it has firms that were among the first […]
