Question 1

Competitive industrial structures are unlikely to create innovative or dynamic firms willing to compete abroad.However,a monopolistic industry will foster innovative,cost efficient,aggressive firms that can adjust to changing economic conditions at home and will be well prepared to compete abroad.

Accepted Answer

This statement is not supported by economic theory or empirical evidence. Competitive industrial structures can create innovative and dynamic firms that are able to compete abroad. Monopolistic industries, on the other hand, may not foster innovation and may lead to higher prices and lower quality for consumers.

Question 2

Mercantilists believed that for a nation to become wealthy,that nation must export as much as possible and,in turn,import as little as possible.

Accepted Answer

Mercantilists believed in the idea of "favorable balance of trade" where a country should export more than it imports in order to accumulate wealth and precious metals. They saw imports as a drain on a nation's resources and believed that exporting goods and minimizing imports would increase a nation's wealth and power.

Question 3

In the 3,000 B.C.,Sumerian farmers realized that the grain surplus they produced could be used as barter for things they did not have.Therefore,the Sumerians obtained copper from Sinai Desert traders who were located several hundred miles to the west in order to make weapons and repel nomadic raiders.The Sumerians engaged in _____

Accepted Answer

The Sumerians obtained copper from traders located several hundred miles away in the Sinai Desert, indicating that they engaged in trade across borders and therefore engaged in international business.

Question 4

Under a preferential duties system,goods imported from a country outside the preferred group are subject to a higher tariff.

Accepted Answer

Under a preferential duties system, goods imported from a country outside the preferred group are indeed subject to a higher tariff. This is meant to incentivize trade with preferred countries by making their goods cheaper and therefore more attractive to import.

Question 5

Someone who believes in the infant industry argument would be MOST likely to support ______ for a new industry.

Accepted Answer

The infant industry argument suggests that new industries need temporary protection from foreign competition in order to become established and competitive in the long run. High tariffs would provide this protection by increasing the cost of foreign imports and making domestic production more competitive.

Question 6

Factor price equalization theory,states that when factors are allowed to move freely among trading nations,efficiency increases,which leads to superior allocation of production of goods and services among countries.

Accepted Answer

The theory states that when factors of production (such as labor and capital) move freely across borders, their prices equalize across countries. This leads to an efficient allocation of resources where goods and services are produced in countries where they can be done so most productively, resulting in an overall superior allocation of production among countries.

Question 7

The infant industry argument is part of the socio-economic category of managed trade.

Accepted Answer

The infant industry argument is a justification for protecting new industries with government intervention until they can become competitive in world markets. This is an example of managed trade, which involves government intervention to promote domestic industries and protect them from foreign competition.

Question 8

Taxes on imports that are collected by a designated government agency responsible for regulating imports are called _____.

Accepted Answer

Custom duties are taxes on imports that are collected by a designated government agency responsible for regulating imports. Ad valorem tariffs are based on the value of the imported product, specific tariffs are based on the quantity of the product, preferential tariffs give special treatment to certain countries, and generalized tariffs do not specify a particular product or country.

Question 9

Singapore,a regional center for global companies,continues to attract sizable amounts of foreign investment given its strategic location,world-class infrastructure,and productive workforce.

Accepted Answer

The statement accurately describes Singapore as a regional center for global companies with attractive qualities for foreign investment such as its strategic location, world-class infrastructure, and productive workforce.

Question 10

Foreign direct investment (FDI)in a country brings funds and business culture from abroad,creates new well-paying jobs,introduces innovative technologies,and enhances the skills of domestic workers.

Accepted Answer

Foreign direct investment (FDI) can bring various benefits for the host country such as creating new job opportunities, facilitating technology transfer, boosting the competitiveness of local industries, improving infrastructure, and enhancing the skills of domestic workers. These benefits can have long-lasting effects on the economy and contribute to its development.

Question 11

Developed countries often resort to managed trade for reasons of unethical labor practices and violation of basic human rights.

Accepted Answer

Managed trade is often used by developed countries to put pressure on exporting countries to improve labor standards and human rights. This is done through measures such as tariffs and quotas on goods produced with unethical labor practices or in violation of human rights.

Question 12

It is estimated that for every billion dollars worth of exports from the United States _____ domestic jobs are created.

Accepted Answer

Exports create jobs in the United States because they increase demand for goods and services, which in turn leads to increased production and employment. The exact number of jobs created per billion dollars of exports varies depending on the industry and other factors, but a study by the National Association of Manufacturers found that exports create an average of 20,000 jobs per billion dollars.

Question 13

Porter stresses the importance of domestic demand for goods and services when determining a nation's competitive advantage.When domestic demand remains high,the number of suppliers will also be high.

Accepted Answer

According to Porter, a strong domestic market can create a more competitive environment, which can lead to the development of more suppliers and stronger domestic industries. Therefore, the statement is true.

Question 14

The growth trends in China and India today illustrate the impact that international business has on blue-collar and white-collar workers in wealthy countries as relatively low-skill factory jobs as well as high-skill service profession jobs migrate overseas.

Accepted Answer

The statement accurately reflects the impact of international business on blue-collar and white-collar workers in wealthy countries as jobs migrate overseas.

Question 15

A specific tariff describes a tax on imports levied as a constant percentage of the monetary value of one unit of the imported good.

Accepted Answer

A specific tariff is a tax on imports levied as a fixed amount per unit of the imported good, not as a constant percentage of the monetary value.

Question 16

It is estimated that for every billion dollars worth of exports from the United States,100,000 domestic jobs are created.

Accepted Answer

The commonly cited figure is that for every billion dollars in exports, around 5,000 to 6,000 jobs are created in the United States, not 100,000.

Question 17

One way international trade benefits consumers is by providing lower living standards.

Accepted Answer

International trade benefits consumers by providing access to a wider variety of goods at competitive prices, which can improve living standards by increasing the availability of goods and services.

Question 18

As of 2013,was the world's largest economy,followed by _____ and _____.

Accepted Answer

According to data from the International Monetary Fund (IMF) in 2013, the United States had the largest economy in the world, followed by China in second place and India in third place. Therefore, option B is the correct answer. Options A, C, D, and E are incorrect.

Question 19

The decoupling of world economic order and the move to a multipolar world helps explain why China is now the world's largest recipient of FDI.

Accepted Answer

The decoupling of the world economic order, where countries are no longer solely reliant on the US, and the shift towards a multipolar world has resulted in China becoming the world's largest recipient of foreign direct investment (FDI). As more countries seek to diversify their investments and establish partnerships with emerging economies, China has become an attractive destination for FDI due to its growing domestic consumer market and economic growth.

Question 20

Porter exemplifies China as a powerhouse for consumer electronics because of the quality and quantity of its engineers,and the ability and willingness of Chinese consumers to try out new electronic products that are perfected and later exported.

Accepted Answer

The answer of Porter exemplifies China as a powerhouse for...

Quiz 2: The Evolution of International Business