IBUS 3001 Midterm Questions –
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globalization ANSW ✔✔ a process of economic integration by the increase of
trade, foreign direct investment, and immigration
Globalization critics argue that the decline in unskilled wage rates is due to the
ANSW ✔✔ migration of low-wage manufacturing jobs offshore
the stock of foreign direct investment refers to ANSW ✔✔ the total
cumulative value of foreign investments
Which of the following expresses one of the reasons why managing an
international firm is different from managing a purely domestic business?
ANSW ✔✔ An international business must find ways to work within the limits
imposed by government intervention in the international trade and investment
system
Globalization resulted in a decrease in non-US firms' investment across
national borders. True or False? ANSW ✔✔ False
mercantilism ANSW ✔✔ An economic policy under which nations sought to
increase their wealth and power by encouraging exports and discouraging
imports. Leads to inflation, based on a view of trade as a zero-sum game.
free trade ANSW ✔✔ when the government does not attempt either to
reduce or to increase the levels of exports and imports that occur naturally as a
result of supply and demand
,new trade theory ANSW ✔✔ countries specialize in the production and export
of particular goods not because of underlying differences in factor
endowments, but because for certain industries, the world market can only
support a limited number of firms. This theory promotes some limited
government intervention
absolute advantage ANSW ✔✔ in the production of a product when it is more
efficient than any other country in producing it
comparative advantage ANSW ✔✔ The ability of a country to produce a good
at a lower cost than another country can. Produce goods at the lower
opportunity cost, and buy goods with the highest opportunity costs
positive sum game ANSW ✔✔ all countries can benefit from trade
Heckscher-Ohlin theory ANSW ✔✔ comparative advantage is the result of
factor endowments - more endowment in a factor means lower costs
Leontief paradox ANSW ✔✔ the US should export more capital intensive
products and import labor intensive ones, but it's exports are less labor
intensive than imports
product life cycle theory ANSW ✔✔ US develops new product → demand in
developed countries grows → Foreign producers begin producing product →
US firms set up facilities in other developed countries → product becomes
standardized → Other countries with lower costs export to US → Developing
countries develop production advantage → Production concentrates in lower
cost countries US is importer of product
economies of scale ANSW ✔✔ unit cost reductions associated with large scale
output - the more you produce, the cheaper each unit is
, factors of endowment ANSW ✔✔ A nation's position in factors of production
such as skilled labor or the infra-structure necessary to compete in a given
industry.
basic factors of production ANSW ✔✔ natural resources, climate, location
advanced factors of production ANSW ✔✔ skilled labor, infrastructure,
technology
demand conditions ANSW ✔✔ the nature of home demand for the industry's
product or service
related and supporting industries ANSW ✔✔ the presence or absence of
supplier industries and related industries that are internationally competitive
Firm Structure, Strategy and Rivalry ANSW ✔✔ how the firm operates,
domestic rivalry, etc.
Bangladesh has a comparative advantage in textile production due to its low
labor cost. The idea of comparative advantage was proposed by ANSW ✔✔
David Ricardo
According to the Heckscher-Ohlin theory, which of the following gives
Bangladesh a cost advantage? ANSW ✔✔ labor-intensive production
Bangladesh's textile industry relies on inputs from other industries within the
country. This supports which one of Michael Porter's attributes when it comes
to competitive advantage ANSW ✔✔ related and supporting industries
100% Correct, Expert Verified
Answers with A+ Grade Assurance
globalization ANSW ✔✔ a process of economic integration by the increase of
trade, foreign direct investment, and immigration
Globalization critics argue that the decline in unskilled wage rates is due to the
ANSW ✔✔ migration of low-wage manufacturing jobs offshore
the stock of foreign direct investment refers to ANSW ✔✔ the total
cumulative value of foreign investments
Which of the following expresses one of the reasons why managing an
international firm is different from managing a purely domestic business?
ANSW ✔✔ An international business must find ways to work within the limits
imposed by government intervention in the international trade and investment
system
Globalization resulted in a decrease in non-US firms' investment across
national borders. True or False? ANSW ✔✔ False
mercantilism ANSW ✔✔ An economic policy under which nations sought to
increase their wealth and power by encouraging exports and discouraging
imports. Leads to inflation, based on a view of trade as a zero-sum game.
free trade ANSW ✔✔ when the government does not attempt either to
reduce or to increase the levels of exports and imports that occur naturally as a
result of supply and demand
,new trade theory ANSW ✔✔ countries specialize in the production and export
of particular goods not because of underlying differences in factor
endowments, but because for certain industries, the world market can only
support a limited number of firms. This theory promotes some limited
government intervention
absolute advantage ANSW ✔✔ in the production of a product when it is more
efficient than any other country in producing it
comparative advantage ANSW ✔✔ The ability of a country to produce a good
at a lower cost than another country can. Produce goods at the lower
opportunity cost, and buy goods with the highest opportunity costs
positive sum game ANSW ✔✔ all countries can benefit from trade
Heckscher-Ohlin theory ANSW ✔✔ comparative advantage is the result of
factor endowments - more endowment in a factor means lower costs
Leontief paradox ANSW ✔✔ the US should export more capital intensive
products and import labor intensive ones, but it's exports are less labor
intensive than imports
product life cycle theory ANSW ✔✔ US develops new product → demand in
developed countries grows → Foreign producers begin producing product →
US firms set up facilities in other developed countries → product becomes
standardized → Other countries with lower costs export to US → Developing
countries develop production advantage → Production concentrates in lower
cost countries US is importer of product
economies of scale ANSW ✔✔ unit cost reductions associated with large scale
output - the more you produce, the cheaper each unit is
, factors of endowment ANSW ✔✔ A nation's position in factors of production
such as skilled labor or the infra-structure necessary to compete in a given
industry.
basic factors of production ANSW ✔✔ natural resources, climate, location
advanced factors of production ANSW ✔✔ skilled labor, infrastructure,
technology
demand conditions ANSW ✔✔ the nature of home demand for the industry's
product or service
related and supporting industries ANSW ✔✔ the presence or absence of
supplier industries and related industries that are internationally competitive
Firm Structure, Strategy and Rivalry ANSW ✔✔ how the firm operates,
domestic rivalry, etc.
Bangladesh has a comparative advantage in textile production due to its low
labor cost. The idea of comparative advantage was proposed by ANSW ✔✔
David Ricardo
According to the Heckscher-Ohlin theory, which of the following gives
Bangladesh a cost advantage? ANSW ✔✔ labor-intensive production
Bangladesh's textile industry relies on inputs from other industries within the
country. This supports which one of Michael Porter's attributes when it comes
to competitive advantage ANSW ✔✔ related and supporting industries
