Intl Bus Chp 5 Final
comparative advantage
A product's components are manufactured in a country that can produce them at a very low cost while maintaining its quality. These components are then assembled in another country where productivity in assembly is high. This process resembles the theory of ________.
comparative advantage
According to the theory of ________, trade is beneficial even if one country is less efficient in the production of two goods, as long as it is less inefficient in the production of one of the goods.
labor
Both absolute and comparative advantage theories assume that ________ is the only resource used in the production process.
country B has an absolute advantage in producing coffee
Country A produces a ton of coffee using one unit of resources. Country B produces two tons of coffee using one unit of resources. Which of the following is true regarding Country A and Country B?
standardized product stage
During which stage of the product life cycle are companies looking for low-cost production bases in developing nations to supply a growing worldwide market?
false
Factor proportions theory states that factors in great supply relative to demand will be more costly than factors in short supply relative to demand.
true
In the maturing product stage of the international product life cycle theory, production facilities are introduced in countries with the highest demand.
manufactured goods
Most of the world merchandise trade is composed of trade in ________.
theory of comparative advantage
Much production in the world today closely resembles what is predicted by the ________.
mercantilism
Nations following the theory of ________ believed that the world's wealth was limited and that a nation could increase its share of the pie only at the expense of its neighbors.
manufactured goods
The international product life cycle theory was put forth for ________.
factor proportions
The new trade theory is mainly at odds with the ________ theory.
true
The theories of comparative advantage and absolute advantage assume that countries are driven only by the maximization of production and consumption.
zero sum game
The theory of absolute advantage destroys the mercantilist idea that international trade is a ________.
true
The theory of absolute advantage measures a nation's wealth by the standard of living of its people
false
The value of trade passing through the borders of all countries exceeds the amount of goods and services they produce.
false
Trade in services tends to be relatively more important for the world's richest countries.
false
When a country's currency is weak relative to other nations, domestic products are more expensive than imports.
maximization of production and consumption
Which of the following is true about the theory of absolute advantage?
they served as a source of military protection
Which of the following statements is incorrect with regard to the importance of colonies for mercantilist nations?
Britain
Which of the following was a prominent mercantilist nation?
