AGB 302 CHAPTER 6 QUESTIONS WITH
CORRECT ANSWERS 2025
Adam Smith - CORRECT ANSWER -Developed the absolute advantage concept
Free Trade - CORRECT ANSWER -
Refers to a situation in which a government does not attempt to influence through quotas or duties what
its citizens can buy from another country, or what they can produce and sell to another country
Competitive Advantage - CORRECT ANSWER -
This theory is the intellectual basis of the modern argument for unrestricted free trade
Heckscher-Ohlin Theory -TCORRECT ANSWER -Ricardo's work was refined to make this theory
New Trade Theory - CORRECT ANSWER -
Stresses that in some cases countries specialize in the production and export of particular products not b
ecause of underlying differences in factor endowments, but because in certain industries the world can o
nly support a limited number of firms
Factor Endowments - CORRECT ANSWER -
The amount of land, labor, capital, and entrepreneurship that a country possesses and can exploit for ma
nufacturing
Theory of National Competitive Advantage - CORRECT ANSWER -
Attempts to explain why particular nations achieve international success in particular industries -
domestic demand and domestic rivalry are considered in addition to factor endowments
Mercantilism - CORRECT ANSWER -
Makes a crude case for government involvement in promoting exports and limiting imports
Mercantilism - CORRECT ANSWER -
The main tenet was that it was in a country's best interests to maintain a trade surplus, to export more th
an it imported
CORRECT ANSWERS 2025
Adam Smith - CORRECT ANSWER -Developed the absolute advantage concept
Free Trade - CORRECT ANSWER -
Refers to a situation in which a government does not attempt to influence through quotas or duties what
its citizens can buy from another country, or what they can produce and sell to another country
Competitive Advantage - CORRECT ANSWER -
This theory is the intellectual basis of the modern argument for unrestricted free trade
Heckscher-Ohlin Theory -TCORRECT ANSWER -Ricardo's work was refined to make this theory
New Trade Theory - CORRECT ANSWER -
Stresses that in some cases countries specialize in the production and export of particular products not b
ecause of underlying differences in factor endowments, but because in certain industries the world can o
nly support a limited number of firms
Factor Endowments - CORRECT ANSWER -
The amount of land, labor, capital, and entrepreneurship that a country possesses and can exploit for ma
nufacturing
Theory of National Competitive Advantage - CORRECT ANSWER -
Attempts to explain why particular nations achieve international success in particular industries -
domestic demand and domestic rivalry are considered in addition to factor endowments
Mercantilism - CORRECT ANSWER -
Makes a crude case for government involvement in promoting exports and limiting imports
Mercantilism - CORRECT ANSWER -
The main tenet was that it was in a country's best interests to maintain a trade surplus, to export more th
an it imported
