Global Dimensions Midterm #2

Heckscher-Ohlin theory stresses that a comparative advantage arises from differences in productivity.

False

In today's world of global communications, rapid transportation, and global markets, cultural differences have ceased to exist

False

The value systems and norms of a country are unrelated to the costs of doing business in that country.

False

______ refers to a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country.

Free trade

______ is a direct restriction on the quantity of some good that may be imported into a country.

Import quota

_____ supports the idea that countries should export more than what they import.

Mercantilism

The ____ argues that a large proportion of the world's new products had been developed by U.S. firms.

Product life-cycle theory

Max Weber was a German sociologist who, in 1904, made the connection between________ and "the spirit of capitalism"

Protestant ethics

Hofstede's uncertainty avoidance dimension considered

The extent to which different cultures socialized their members into accepting ambiguous situations and tolerating uncertainty.

Which of the following statements about values and norms of a culture is true?

The values and norms of a society influence social structure.

According to Ricardo's theory of comparative advantage, countries shall not produce a good, even if they have an absolute advantage in its production, if they do not produce it efficiently.

True

Anti-dumping policies are designed to punish foreign firms that are engaged in dumping

True

First-mover advantages are the economic and strategic advantages that accrue to early entrants into an industry

True

_____ is a quota on trade imposed by the exporting country, typically at the request of the importing country's government.

Voluntary Export Restraint

Ethical systems are

a set of moral principles, or values, that are used to guide and shape behavior

Porter contends that government

can influence each of the four components of the diamond either positively or negatively

The connection between ______ and ______ has implications for the choice of countries in which to locate production facilities and do business

culture and competitive advantage

Under a tariff rate quota, a higher tariff rate is applied to imports within the quota than those over the quota.

false

The infant industry argument is criticized because it relies on an assumption that

firms are unable to make efficient long-term investments by borrowing money from the domestic or international capital market.

According to the strategic trade policy argument

government support can help domestic firms overcome the first-mover advantages enjoyed by foreign competitors.

The social organization of Western society tends to emphasize on

individual achievement.

The theory of comparative advantage suggests that a trade is a ____ game in which all countries that participate realize economic gains.

positive-sum

The extra profit that producers make when supply is artificially limited by an import quota is referred to as a _______.

quota rent

Religion may be defined as

shared beliefs and rituals that are concerned with the realm of the sacred.

By lowering production costs _____ help domestic producers compete against foreign imports

subsidies

Hecksher-Ohlin theory supports the case for unrestricted free trade between nations

true

The principle of mercantilism views trade as a(n) _____ game

zero-sum

_______ are levied as a proportion of the value of the imported good

Ad valorem tariffs

Which of the follow is an example of ethnocentrism?

An american manager criticizes the cultural practices of Saudi Arabia, when he is sent there on business, because it differs from his own cultural norms.

_______ is variously defined as selling goods in a foreign market at below their costs of production or as selling goods in a foreign market at below their "fair" market value.

Dumping