QUESTION Individual firms should invest substantial financial resources in trying to build a first-mover advantage, even if that means several years of losses before a new venture becomes profitable. Indicate whether the statement is true or false. ANSWER TRUE Individual firms should realize that it pays to invest substantial financial resources in trying to […]
QUESTION Porter’s theory suggests that it is in the best interest of business for a firm to invest in upgrading advanced factors of production. Indicate whether the statement is true or false. ANSWER TRUE Porter’s theory suggests that it is in the best interest of business for a firm to invest in upgrading advanced […]
QUESTION Sentoria is an island nation in the Pacific Ocean. Its geographical location is advantageous since it has access to a variety of aquatic life forms and also a number of freshwater sources that provide for fisheries. The lack of arable land drives local demand for seafood. The competition in the domestic fishing industry is […]
QUESTION Which of the following terms best represents a situation in which a government does not attempt to influence through quotas or duties what its citizens can buy from another country, or what they can produce and sell to another country? A. Free trade B. Positive-sum game C. Socialism D. Absolute advantage E. Zero-sum game […]
QUESTION Salcia is a country that depends heavily on domestic products. The Salcian government decides on the products that can be imported and ensures that any product that can be produced at home is not imported. A major part of Salcia’s trade is concentrated on exporting agricultural produce and textiles. Which of the following influences […]
QUESTION Which of the following asserts that countries should simultaneously encourage exports and discourage imports? A. Ethnocentrism B. Capitalism C. Collectivism D. Mercantilism E. Socialism ANSWER D
QUESTION Which of the following factors is taken into consideration by David Ricardo’s theory of comparative advantage in order to explain the pattern of international trade? A. Absolute advantage of a country with reference to natural resources B. The proportions in which the factors of production are available C. International differences in labor productivity D. […]
QUESTION Which of the following is consistent with the central beliefs of mercantilism? 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 […]
QUESTION The Republic of Argonia, owing to its vast resources of arable land and fresh water, is an agrarian nation. It exports agricultural products and in turn imports products that it does not produce such as oil, machinery, computers, and electronic devices. The result is that it spends more on imports than it gains from […]
QUESTION Considered to be the first theory of international trade, the principal assertion of mercantilism is that: A. countries differ in their ability to produce goods efficiently. B. gold and silver are the mainstays of a country’s wealth and essential to vigorous commerce. C. countries should specialize in the production of goods for which they […]
