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International Trade Theories Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Page 1

Question 1 1. David Ricardo wanted to address the shortfalls in which theory of international trade?

Question 2 2. Mercantilists believed that a country could increase the amount of wealth it had by _____.

Question 3 3. What was the first economic theory of international trade to be developed?

Question 4 4. The factor proportions theory focuses on gaining a comparative advantage using all of the following factors EXCEPT _____.

Question 5 5. According to Adam Smith, the trade between countries should happen _____.

Page 2

Question 6 6. How do tariffs make domestic goods more competitive?

Question 7 7. Why is GATT relevant for the international system?

Question 8 8. Which of the following is FALSE about economic integration?

Question 9 9. Why might a country engage in trade protectionism?

Question 10 10. What organization is involved with the regulation of international trade between its members?

Page 3

Question 11 11. If a country were to produce only good X, it can produce 20 units. If it were to only produce good Y, it can produce 100 units. what is the opportunity cost of producing good X?

Question 12 12. The gains from trade are maximized when a country specializes in producing what:

Question 13 13. Gains from trade expressed in economic terms are:

Question 14 14.

Here is the current situation for what two food processing companies can produce:

Company Cereal Snacks
Good Grain 40 25
Super Puffs 30 30

What are the opportunity costs for producing cereal ?

Question 15 15. Countries should specialize in which products and services?

Page 4

Question 16 16. When the United States and Canada can import and export products across its border with no restrictions, it is called _____.

Question 17 17. Why would a country wish to pursue open trade policies?

Question 18 18. When a nation with low labor costs and few government restrictions on business enacts open trade agreements, which of these will likely happen?

Question 19 19. Which of the following is NOT a way for a country to be successful at international trade?

Question 20 20. Colombia produces the best and lowest cost coffee in the world. This gives Colombia a _____ over other nations.

Page 5

Question 21 21. The Geert-Hofstede model does not use _____ to determine the similarities between two countries.

Question 22 22. The Product Life Cycle theory has three stages. The stages do not include...

Question 23 23. What are the four main determinants in Porter's National Comparative Advantage Theory?

Question 24 24. What is a theory that focuses on multinational corporations and how to gain a competitive advantage over others in the industry?

Question 25 25. What theory looks at network effects and economies of scale when it comes to the growth of globalization?

Page 6

Question 26 26. When are tariffs not placed on goods and services?

Question 27 27. What is one con of NAFTA?

Question 28 28. What are tariffs?

Question 29 29. What is a pro of free trade?

Question 30 30. What three countries participate in NAFTA?

International Trade Theories Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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