exam 1

China's state-owned enterprises

are less productive than its private sector businesses.

A __________ economy follows the principles of collectivism as resources are allocated based on "the common good."

command

Historically, communist countries focused on collectivist goals. The government planned production, fixed commodity prices, and also directed investments to ensure they benefitted the nation as a whole and not only a few individuals. What type of economy did this represent?

command

Under common law, __________ refers to the ways in which laws are applied in specific situations.

custom

A country that abolishes laws that regulate private enterprises and removes price controls is in the process of

deregulation

A country that has lax intellectual property laws will find that

firms will be reluctant to enter into such a country.

Wise Eyes Corporation has developed a new oral supplement to prevent macular degeneration. Which type of legal protection grants Wise Eyes Corporation exclusive rights for a defined period to the manufacture, use, or sale of this new supplement?

patent

The geographical location of a Pacific island is advantageous for the seafood industry because it has access to a variety of aquatic life forms and also a number of freshwater sources. The lack of arable land drives local demand for seafood, and the island is one of the world's major exporters of seafood products. Which theory of international trade best explains this island's dominance as an exporter of seafood?

theory of national competitive advantage

Using your knowledge of New Trade Theory, which statement best explains the advantage Airbus has in the production and export of super large capacity aircraft?

Airbus has been able to capture scale economies that make it difficult for later entrants to match.

New Trade Theory would suggest that Boeing has stayed out of head-to-head competition with Airbus in the super large capacity aircraft sector because

Airbus was first to market with the Airbus 380 aircraft.

Which activity engaged in by Big Town Billiards best exemplifies innovation?

Big Town Billiards developed a new business model by selling directly to customers.

Which best characterizes the political system in China?

China is a one-party state.

China: Xi Jinping, the new party chief, has said officials need to guard against corruption as its spread would doom the party and the state.

Communist Totalitarianism

A textbook author would apply for a trademark to obtain the exclusive legal rights associated with their written piece.

False

According to the product life-cycle theory, the ultimate result is that production of goods becomes concentrated in the country where a product originated—typically, a developed nation.

False

Contracts in a common law system tend to be shorter and less detailed than those created in a civil law system.

False

When considering the violation of property rights, blackmail is a form of public action.

False

India, China, and Indonesia have all focused on improving their education systems and implementing market reforms. Which of the following is true about education and economic development?

India, China, and Indonesia should rank higher on the Human Development Index as compared to countries that have not invested in education.

Using the information on political economy in your text and the case above, how would you characterize Venezuela's political economy under President Nicolas Maduro?

Pseudo-democracy

China, India, and Indonesia are all expected to grow faster than the United States in the next few decades. ________ allows us to better understand cost of living differences between these countries.

Purchasing power parity

United States: Two major political parties field candidates for federal, state, and local elections.

Representative Democracy

Italy in the 1930s: Benito Mussolini's dictatorship.

Right-Wing Totalitarianism

France: State-owned enterprises allow for the "public good rather than the private profit."

Social Democracy

For decades, there have been just two producers of large commercial aircraft, Boeing and Airbus. Which statement best explains how New Trade Theory views this situation from a manufacturing perspective?

The economies of scale required to be a profitable manufacturer effectively limit the size of the global market.

Saudi Arabia: Ruled by an Islamic absolute monarchy.

Theocratic Totalitarianism

Based on the information on political economy in the text and the case on Venezuela above, which statement best characterizes the situation in Venezuela?

There is probably a high level of corruption within the government.

Zimbabwe: Defeated in 2008 parliamentary elections, President Mugabe remains in power today.

Tribal Totalitarianism

Judges under a civil law system have less flexibility than those under a common law system.

True

China, India, and Indonesia are expected to be among the world's seven largest economies by 2050. Economic development in a country can be measured using

gross national income

China's economic growth from the late 1970s to the present can largely be attributed to

its shift toward more private enterprises.

Before Hugo Chavez took power in 1999, what type of economic system was in place in in Venezuela?

mixed

How can Venezuela's economic system best be described during Hugo Chavez's years as president?

mixed

Hugo Chavez's move to nationalize troubled firms is consistent with a

mixed economy.

Which is not a factor contributing to economic growth in China since the 1970s?

nationalization of most vital industrial sectors

By 2050, India will be one of the largest economies in the world. A disadvantage of using data such as GNI and PPP to understand the attractiveness of India as an export or investment market is that they

provide a static picture of development.

Consumer Agriculture Inc. is planning an international expansion. In terms of the costs involved in conducting business in a country, it will be most economical for the company if it chooses a country

where politicians are held accountable by the electorate.