Question 1

Because Colombia can produce coffee so much more efficiently than other items produced there,it has which of the following advantages?

Accepted Answer

A comparative advantage occurs when a country specializes in products that it can supply more efficiently or at a lower cost than it can produce other items.

Question 2

A favorable balance of trade exists when a country

Accepted Answer

A trade surplus exists when a country exports more than it imports;this is favorable because it is receiving more money than it is paying out.

Question 3

International business involves the buying,selling,and trading of goods and services across national boundaries.

Accepted Answer

International business refers to the buying,selling,and trading of goods and services across national boundaries.

Question 4

The U.S.has a trade deficit because

Accepted Answer

A trade deficit exists when a country imports more goods and services than it exports.

Question 5

Protective tariffs raise the price of foreign goods to allow competition with more expensive domestic goods.

Accepted Answer

Protective tariffs allow more expensive domestic goods to compete with foreign ones.

Question 6

Exporting is the purchase of products from another nation.

Accepted Answer

Exporting is the selling of goods and services to foreign markets.

Question 7

Nations trade with other nations to obtain resources that would otherwise be unavailable to them.

Accepted Answer

Nations and businesses engage in international trade to obtain raw materials and goods that are otherwise unavailable to them or are available elsewhere at a lower price than that at which they themselves can produce.

Question 8

Because it virtually controls the world's deposits of gem-quality diamonds,DeBeers Consolidated Mines,Ltd.has a(n)

Accepted Answer

An absolute advantage is a monopoly that exists when a country is the only source of an item,the only producer of an item,or the most efficient producer of an item.

Question 9

The difference between the flow of money into and out of a country is called its

Accepted Answer

A balance of payments includes a country's balance of trade,foreign investment and aid,loans,military expenditures,and money spent by tourists.

Question 10

An absolute advantage exists when a country has a monopoly on a natural resource.

Accepted Answer

An absolute advantage or monopoly exists when a country is the only source of an item,the only producer of an item,or the most efficient producer of an item.

Question 11

A balance of trade refers to the buying,selling,and trading of goods and services across national boundaries.

Accepted Answer

A nation's balance of trade is the difference in value between its exports and imports.

Question 12

The primary problem with a trade deficit is

Accepted Answer

A trade deficit may be harmful to a country's economy through failed businesses,loss of jobs,and a lower standard of living.

Question 13

When a nation imports more than it exports,it has a positive balance of trade.

Accepted Answer

When a nation is importing more than it is exporting,it has a trade deficit.

Question 14

In international trade,what is the difference between an absolute advantage and a comparative advantage?

Accepted Answer

The answer of In international trade,what is the difference between...

Question 15

The balance of payments includes all the following except

Accepted Answer

A balance of payments is the difference between the flow of money into and out of a country;domestic investments do not flow out of the country.

Question 16

When Madison flies to Italy from the United States on a British airline,stays in Italian hotels,and buys clothing in Milan to bring home after her trip,she

Accepted Answer

The balance of payments is the difference between the amount of money flowing in and out of a country.Because Madison spent her money outside the U.S. ,she contributed to the flow of money out of the U.S.and therefore to the negative balance of payments.

Question 17

The Webb-Pomerene Export Trade Act allows selected U.S.firms desiring international trade to form monopolies to compete with foreign cartels.

Accepted Answer

The Webb-Pomerene Export Trade Act of 1918 allows selected U.S.firms to form monopolies to compete with foreign monopolistic organizations.

Question 18

When Solar Tech,Inc. ,of Taos,New Mexico,sells thin film solar panels to a firm in Tokyo,Japan,Solar Tech

Accepted Answer

Exporting is the sale of goods and services (contacts)to foreign markets (from the U.S.to Russia).

Question 19

A trade advantage with the best chance of surviving is one based on

Accepted Answer

When a country has a monopoly on a resource,it has the ability to exploit this advantage without threats from competition,as in the case of De Beers Consolidated Mines,by maintaining high prices for the resource.

Question 20

Define the terms "balance of trade" and "balance of payments." What is the difference between these terms? Why are they important measures?

Accepted Answer

The answer of Define the terms "balance of trade" and...

Quiz 3: Business in a Borderless World