Question 1

Describe briefly the shortcomings of the product life-cycle theory.

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Question 2

In his product life-cycle theory,Raymond Vernon argued that for most of the twentieth century a very large proportion of the world's new products had been developed by U.S.firms,produced in the U.S. ,and sold first in the U.S.market.What reasons does he cite for U.S.firms basing initial production at home and not at some low-cost foreign location?

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Question 3

Porter's theory counts demand conditions as one of the four broad attributes of a nation,shaping the environment in which local firms compete.Briefly explain how it is so and mention at least two examples to support the explanation.

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Question 4

Discuss Paul Samuelson's critique of free trade,where he argued that in some circumstances,dynamic gains can lead to an outcome that is not so beneficial.

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Question 5

Briefly describe the new trade theory.

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Question 6

How does Porter's theory predict patterns in international trade? Do his predictions hold up in a real-world scenario?

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Question 7

What are first-mover advantages? Outline the relationship between economies of scale,first-mover advantages and the pattern of trade as indicated by new trade theory.

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Question 8

Describe the Leontief paradox.

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Question 9

Identify and briefly describe the four broad attributes of a nation identified by Michael Porter as shaping the environment in which local firms compete,and promote or impede the creation of competitive advantage.Also,outline Porter's conclusions from his analysis.

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Question 10

From a profit perspective based on the various international theories,how would a business go about choosing locations for its various productive activities?

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Question 11

Discuss the policy implications of Porter's theory of national competitive advantage.

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Quiz 5: International Trade Theory