Deck 1: International Trade and Globalization

Question 1

What are the four factor endowments?

A)national resources, labor, physical capital and human capital
B)types of technology
C)material inputs used up in the process of production
D)international differences in climate

Answer 1

national resources, labor, physical capital and human capital

Question 2

The Heckscher- Ohlin model is principally focused on what aspect of economics?

A)international trade
B)supply and demand
C)normative economics
D)production possibility frontier

Answer 2

international trade

Question 3

A no-trade world will have which of the following characteristics:

A)countries will have same relative endowments of production factors
B)consumers across countries will have identical and homogenous tastes
C)there will be no distortions or externalities
D)all of the above

Answer 3

all of the above

Question 4

Transportation cost of trade affects:

A)pattern of trade
B)boundaries between tradable and non-tradable goods
C)global supply chains
D)all of the above

Question 5

What was the first economic theory of international trade to be developed?

A)the theory of mercantilism
B)the theory of comparative advantage
C)the theory of absolute advantage
D)the heckscher-ohlin theory

Question 6

According to Adam Smith, the trade between countries should happen _____.

A)naturally according to the market forces
B)under government regulation
C)using factors that are available
D)only when a country has an absolute advantage

Question 7

According to the principle of comparative advantage:

A)south korea should export steel
B)south korea should export steel and dvds
C)japan should export steel
D)japan should export steel and dvds

Question 8

Globalization refers to:

A)lower incomes worldwide
B)less foreign trade and investment
C)global warming and their effects
D)a more integrated and interdependent world

Question 9

Comparative Cost Trade Theory is given by

A)adam smith
B)david ricardo
C)gottfried haberle
D)heckscher ohlin

Question 10

……………..is the payment method most often used in International Trade which offers the exporter best assurance of being paid for the products sold internationally.

A)bill of lading
B)letter of credit
C)open account
D)drafts

Question 11

Key controllable factors in global marketing are:

A)government policy and legislation
B)social and technical changes
C)marketing activities and plans
D)all of the above.

Question 12

The first phase of globalization started around 1870 and ended with ….

A)world war i
B)world war ii
C)the establishment of gatt
D)in 1913 when gdp was high

Question 13

According to this theory, the holdings of a country's treasure primarily in the form of gold constituted its wealth.

A)gold theory
B)ricardo theory
C)mercantilism
D)hecksher theory

Question 14

The Theory of Absolute Cost Advantage is given by

A)david ricardo
B)adam smith
C)f w taylor
D)ohlin and heckscher

Question 15

The Theory of Relative Factor Endowments is given by

A)david ricardo
B)adam smith
C)c. f w taussig
D)ohlin and hecksher

Question 16

A multinational is a firm that controls and manages production facilities in

A)both developed and developing countries
B)at least two countries
C)one country but relies on multiple markets for the consumption of goods it produces
D)at least two developed countries and one developing country

Question 17

Which of the following would be an example of foreign direct investment from the United States to Taiwan?

A)au.s. bank buys bonds issued by a taiwan computer manufacturer.
B)au.s.car manufacturer enters into a contract with a taiwan firm to make and sell it spark plugs.
C)microsoft hires a taiwanese computer programmer to debug some software for it.
D)the state of california rents space in taipei for one of its employees to use promoting tourism in