SOM 354 exam 3 Questions and
answers graded A+ latest updated
free trade - correct answer ✔✔The absence of barriers to the free flow of goods and services
between countries
new trade theory - correct answer ✔✔The observed pattern of trade in the world economy may
be due in part to the ability of firms in a given market to capture first-mover advantages
Mercantilism - correct answer ✔✔economic philosophy advocating that countries should
simultaneously encourage exports and discourage imports
zero-sum game - correct answer ✔✔a situation in which an economic gain by one country
results in an economic loss by another
absolute advantage - correct answer ✔✔the ability to produce a good using fewer inputs than
another producer
Constant Returns to Specialization - correct answer ✔✔The units of resources required to
produce a good are assumed to remain constant no matter where one is on a country's
production possibility frontier
Factor Endowments - correct answer ✔✔A country's endowment with resources such as land,
labor, and capital
economies of scale - correct answer ✔✔Cost advantages associated with large operations
, first-mover advantage - correct answer ✔✔advantages accruing to the first to enter a market
trade balance - correct answer ✔✔gap between exports and imports
Porter's Diamond - correct answer ✔✔Factor endowments
Demand conditions
Related and supporting industries
Firm strategy, structure, and rivalry
Specific Tariff - correct answer ✔✔tariff levied as a fixed charge for each unit of good imported
Ad Valorem Tariff - correct answer ✔✔a tariff levied as a proportion of the value of an imported
good
subsidies - correct answer ✔✔Government financial assistance to a domestic producer
import quota - correct answer ✔✔a direct restriction on the quantity of a good that can be
imported into a country
Voluntary Export Restraint - correct answer ✔✔A quota on trade imposed from the exporting
country's side, instead of the importer's; usually imposed at the request of the importing
country's government
local content requirement - correct answer ✔✔a requirement that some specific fraction of a
good be produced domestically
administrative policies - correct answer ✔✔policies, typically adopted by government
bureaucracies, that can be used to restrict imports or to boost exports
answers graded A+ latest updated
free trade - correct answer ✔✔The absence of barriers to the free flow of goods and services
between countries
new trade theory - correct answer ✔✔The observed pattern of trade in the world economy may
be due in part to the ability of firms in a given market to capture first-mover advantages
Mercantilism - correct answer ✔✔economic philosophy advocating that countries should
simultaneously encourage exports and discourage imports
zero-sum game - correct answer ✔✔a situation in which an economic gain by one country
results in an economic loss by another
absolute advantage - correct answer ✔✔the ability to produce a good using fewer inputs than
another producer
Constant Returns to Specialization - correct answer ✔✔The units of resources required to
produce a good are assumed to remain constant no matter where one is on a country's
production possibility frontier
Factor Endowments - correct answer ✔✔A country's endowment with resources such as land,
labor, and capital
economies of scale - correct answer ✔✔Cost advantages associated with large operations
, first-mover advantage - correct answer ✔✔advantages accruing to the first to enter a market
trade balance - correct answer ✔✔gap between exports and imports
Porter's Diamond - correct answer ✔✔Factor endowments
Demand conditions
Related and supporting industries
Firm strategy, structure, and rivalry
Specific Tariff - correct answer ✔✔tariff levied as a fixed charge for each unit of good imported
Ad Valorem Tariff - correct answer ✔✔a tariff levied as a proportion of the value of an imported
good
subsidies - correct answer ✔✔Government financial assistance to a domestic producer
import quota - correct answer ✔✔a direct restriction on the quantity of a good that can be
imported into a country
Voluntary Export Restraint - correct answer ✔✔A quota on trade imposed from the exporting
country's side, instead of the importer's; usually imposed at the request of the importing
country's government
local content requirement - correct answer ✔✔a requirement that some specific fraction of a
good be produced domestically
administrative policies - correct answer ✔✔policies, typically adopted by government
bureaucracies, that can be used to restrict imports or to boost exports
