A) retain these goods for strict domestic sales.
B) trade these goods for goods produced by other countries.
C) sell these products domestically at prices which are much below the cost price.
D) sell these products at a price, which is lower than the cost price, in developing countries so as to help them achieve economic progress.
E) devote all available resources to produce only those goods.
G) B) and D)
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A) constant
B) basic
C) advanced
D) complementary
E) comparative
G) All of the above
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A) Trade increases the specialization of production within an industry.
B) Nations benefit from trade only when they differ in factor endowments.
C) Government intervention and strategic trade policies are more likely to harm international trade than free trade.
D) The locus of global production initially switches from the United States to other advanced nations.
E) Comparative advantage arises from differences in productivity and factor endowments.
G) A) and E)
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Paul Samuelson's critique looks at what ...View Answer
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A) Demographics
B) Climate
C) Natural resources
D) Skilled labor
E) Location
G) B) and E)
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One of the themes in new trade theory is...View Answer
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A) Product life-cycle theory
B) Heckscher-Ohlin theory
C) The concept of absolute advantage
D) Mercantilism
E) Theory of national competitive advantage
G) B) and E)
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A) comparative advantage
B) relative advantage
C) differential advantage
D) absolute advantage
E) conditional advantage
G) B) and E)
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B) False
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A) labor productivity
B) the returns obtained from the factors
C) diminishing returns
D) factor costs
E) trade barriers
G) A) and C)
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A) the ability to capture first-mover advantages is restricted in a world that allows trade.
B) differences in labor productivity between nations underlie the notion of comparative advantage.
C) a country may predominate in the export of a good because it has firms that were among the first to produce that good.
D) to ensure economic progress, countries should implement several trade barriers.
E) different goods use resources in different proportions and this leads to constant returns to specialization.
G) B) and D)
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A) the locus of global production initially switches from the United States to other advanced nations.
B) world trade in certain products may be dominated by countries whose firms were first movers in their production.
C) differences in technology may lead to differences in productivity, which in turn, drives international trade patterns.
D) differences in labor productivity between nations underlie the notion of comparative advantage.
E) a rich country might actually be worse off by switching to a free trade regime with a poor nation.
G) A) and B)
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A) A situation in which the market mechanism determines what a country imports and what it exports.
B) A situation in which a country engages in international trade even for products it is able to produce for itself.
C) A situation in which a gain by one country results in a loss by another.
D) A situation in which limits on imports are often in the interests of domestic producers, but not domestic consumers.
E) A situation in which one country has an absolute advantage in the production of all goods.
G) A) and B)
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A) First-mover advantages
B) Comparative advantages
C) Constant returns to specialization
D) Demand conditions
E) Economies of scale
G) A) and C)
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B) False
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A) Basic factor endowments
B) Advanced factor endowments
C) Firm strategy
D) Demand conditions
E) Supporting industries
G) C) and D)
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A) there exist differences in the prices of resources in different countries.
B) resources can move freely from the production of one good to another within a country.
C) all resources are not of the same quality.
D) different goods use resources in the same proportions.
E) trade does not affect the income distribution within a country.
G) C) and E)
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A) The Heckscher-Ohlin theory
B) Mercantilism
C) The theory of comparative advantage
D) Leontief's paradox
E) The Samuelson critique
G) None of the above
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A) Trade results in a contraction of the size of the markets of individual firms.
B) Trade allows for production of products at higher prices.
C) Trade increases the variety of goods available to consumers and lowers the costs of those goods.
D) Trade allows countries to attain self-sufficiency in the production of all goods.
E) Trade guarantees first-mover advantages to all the countries that engage in trade.
G) C) and D)
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According to Porter's model of internati...View Answer
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