Chapter 6 - International Business Theories

Create an informative and visually appealing illustration representing international trade and business theories, featuring elements like globes, currency, goods being exchanged, and various flags.

Explore International Business Theories

Test your knowledge on the key theories of international business through this engaging quiz. Covering essential concepts such as mercantilism, absolute advantage, and the Porter Diamond, this quiz will challenge your understanding and deepen your insights into global trade.

Topics include:

Trade Theories
Comparative and Absolute Advantage
Factor Proportions
Product Life Cycle

15 Questions4 MinutesCreated by ThinkingTrade327

The trade theory that premises a country's wealth is measured by its holdings of treasure, usually in gold, is known as _______.

Monetarism

Billionism

Mercantilism

The Porter Diamond

______ holds that there are advantages to trade because different countries can produce different goods more efficiently than others.

The tradable goods theory

A favorable balance of trade

The theory of absolute advantage

The product life cycle theory

Comparative advantage holds that there is a basis for trade when Country A specializes _______.

In producing the product that it can produce more efficiently than another product even though Country B can produce both products more efficiently than Country A

In producing those goods and services it can produce more efficiently than Country B

In labor-intensive products and Country B specializes in capital-intensive products

In new products and Country B specializes in mature products

Under mercantilism, governments sought to influence trade by limiting imports and subsidizing exports.

True

False

The theory of absolute advantage holds that a country will gain from trade even though it can produce all goods more efficiently than other countries.

True

False

The factor proportions theory holds that a country will benefit most from trade by importing labor-intensive products and exporting capital-intensive products.

True

False

At an early stage of a product's life cycle, the product is apt to be made in a more capital-intensive method than in its later stages.

True

False

The factor proportions theory of trade says that a country will have its best trade advantage if it concentrates on _______.

Producing products using its scarce production factors

Exporting its expensive products

Producing products using its abundant production factors

Importing labor-intensive products and exporting capital-intensive ones

All of the following are conditions of the Porter Diamond except _________.

related and supporting industries

Demand conditions

factor conditions

Governmental assistance conditions

The term used to describe a country's loss of highly educated productive human resources is known as _______.

A Porter Diamond by recipient countries and a diamond in the rough by origin countries

Dual development

an unfavorable balance of trade

Brain drain

The free trade theories of specialization assume that countries have objectives other than economic efficiency.

True

False

At an early stage of a product's life cycle, the product is apt to be made in a more capital-intensive method than in its later stages.

True

False

A consumer durable product is more apt to behave according to the product life cycle theory of trade and development than a product with very rapid obsolescence.

True

False

Chapter 6 - International Business Theories

Explore International Business Theories

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