Bus 187 ch 4-8

Four basic principles of social stratification

-trait of society -carries over into next generation -generally universal but variable -involves not just inequality but also beliefs

"Theory of Comparative Advantage" (1817)

Countries should specialize in the production of those goods they produce most efficiently & buy goods that they produce less efficiently from other countries

True or False: New trade theorists stress that role or luck in giving a firm first-mover advantages.

False

True or False: The term social strate refers to the extene to which individuals can move out of hte strata into which they were born.

False

True or False: The theories of Smith and Ricardo show that countries should not engage in international trade for products that is able to produce for itself.

False

True or False: Under a tariff rate quota, a higher tariff rate is applie to imports within the quota than those over the quota.

False

True or Flase: In today's world of glbal communications, rapid transportation, and global markets, cultural differences have ceased to exist.

False

True or False: Antidumping policies are designed to punish foreign firms that are engaging in dumping.

True

True or False: Guanxi is an important mechanism for building long-term business relationships and gettings business done in China.

True

Adam Smith (1776) argued:

a country has an absolute advantage in the production of a product when it is more efficient than any other country in producing it

Mercantilist views trade as:

a zero-sum game -- a gain by one country results in a loss by another

______ argue that countries should specialize in the production of goods for which they have an absolute advantage. a) Adam Smith b) David Ricardo c) David Hume d) Paul Krugman

a) Adam Smith

Max Weber has a German sociologist who, in 1904, made the connection between ______ and "the spirit of capitalism." a) Protestant Ethics b) cross-cultural literacy c) collectivism d) ethnocentrism

a) Protestant Ethics

Porter contends that government: a) can influence each of the four components of the diamond either positively or negatively. b) has little or no effect on the four components that shape the environment in which firms compete c) can influence the factor endowments and the related and supporting industries components of the diamond, but not the other two components. d) can influence the domestic conditions and the domestic rivalry components of the diamond, but not the other two components.

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

______ 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. a) dumping b) export restrain c) Ad valorem d) logical content requirement

a) dumping

The Heckscher-Ohline theory predicts that countries will: a) export those goods that make intensive use of factors that are locally abundant. b) import those goods that make intensive use of factors that are available world-wide c) export those goods that make intensive use of factors that are locally scarce d) import those goods that make intensive use of factors that are locally abundant.

a) export those goods that make intensive use of factors that are locally abundant.

______ is a direct restriction on the quantity or some good that may be imported into a country. a) import quota b) import tariff c) ad valorem tariff d) import subisdy

a) import quota

Product life-cycle theory

as products mature both the location of sales and the optimal production location will change affecting the flow and direction of trade

Max Weber theorized that there was a relationship between Protestantism and the emergence of modern capitalism because: a) Protestantism promotes blind loyalty to employers. b) Prestant ethics emphasize the importance of hard work and wealth creation and frugalitiy c)Protestantism states that spiritual growth is more important than material wealth. d) Protestantism promotes the hierarchial domination of religious and social life.

b) Prestant ethics emphasize the importance of hard work and wealth creation and frugalitiy

Which of the following statements about values and norms of a culture is true? a) The values and norms of a society are not influence by religion. b) The values and norms of a society are not the evolutionary product of a number of factors. c) The values and norms of a society influence social structure. d) The values and norms of a society emerge fully formed.

b) The values and norms of a society are not the evolutionary product of a number of factors.

______ are levied as a proportion of the value of the imported goods. a) Tariff rate quotas b) Ad valorem tariffs c) Specific tariffs d) Import quotas

b) ad valorem tariffs

The infant industry argument is criticized because it relies on an assumption that: a) new manufacturing industries in developing nations can initially compete with established industries in developed countries. b) firms are unable to make efficient long-term investments by borrowing money from the domestic or international capital market. c) the domestic industry in a developing nation lacks the capacity to meet demand. d) selling goods in a foreign market at below their "fair" market value is legally and ethically justified.

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

The extra profit that producers make when supply is artificially limited by an import quota is referred to as a _______. a) specific tariff b) subsidy c) quota rent d) tariff rate quota

b) subisdy

Hofstede's uncertainty avoidance dimension considered: a) how a society deals with the fact that people are unequal in physical and intellectual capabilities. b) the extent to which different cultures socialized their members into accepting ambiguous situations and tolerating uncertainty. c) the relationship between gender and work roles. d) the relationship between the individual and his or her fellows.

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

_______ is a quota on trade imposed by the exporting country, typically at the request of the importing country's government. a) Trade reconciliation b) Ad valorem tariff c) Voluntary export restraint d) Specific tariff quota

c) Voluntary export restraint

Ethical systems are: a) routine conventions of everyday life. b) social rules that govern people's actions toward each other. c) a set of moral principles, or values, that are used to guide and shape behavior d) shared beliefs and rituals that are concerned with the realm of the sacred.

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

According to the strategic trade policy agrument: a) selling goods in a foreign market at below their "fair" market value is legally and ethically justified. b) a government should use subsidies to support promising firms that are active in old, established industries. c) government support can help domestic firms overcome the first-mover advantages enjoyed by foreign competitors. d) government intervention is not required because firms can borrow money from the capital markets to finance the required invenstments.

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

According to Ricardo's theory of comparative advantage, countries should: a) produce all the products for which they have an absolute advantage b) produce only the products for which they have an absolute advantage c) specialize in the production of those goods that it produces most efficiently d) specialize in the production of those goods that their competitors in the world market currently have monoplies on.

c) specialize in the production of those goods that it produces most efficiently

Which of the following statesments about the use of spoken language is true? a) the language of a society does not direct the attention of its members to certain features of the world rather than others. b) Countries wiht more than one language often only have one culture c) The nature of a lanugage has no effect on the way we perceive the world. d) Most people prefer to converse in their own language rather than English.

d) Most people prefer to converse in their own language rather than English.

The connection between _______ and _______ has important implications for the choice of countries in which to locate production facilities and do business. a) values; norms b) class system; society c) moral principles; values d) culture; competitive advantage

d) culture; competitive advantage

______ are unit cost reductions associated with a large scale of output. a) current account deficits b) current account surpluses c) factor endowments d) economies of scale

d) economies of scale

______ supports the idea that countries should export more than they import. a) the world market theory b) absolute advantage c) new trade theory d) mercantilism

d) mercantilism

By lowering production costs, _______ help domestic producers compete against foreign imports. a) quotas b) duties c) tariffs d) subsidies

d) subsidies

The principle of mercantilism views trade as a(n) _______ game. a) advantage b) negative-sum c) positive-sum d) zero-sum

d) zero-sum

Protectionism

government passes law to discourage trade -- limit foreign competition

Mercantilist

suggests that it is in a country's best interest to maintain a trade surplus -- to export more than it imports

New trade theory

suggests that the ability of firms to gain economies of scale can have important implications for international trade

Social mobility

the extent to which individuals can move out of the social strata into which they are born