CH 4 INTERNATIONAL TRADE THEORY QUIZ

According to Smith, trade in absolute advantage is a zero-sum game.

• True

• False

What is the second stage of the product life cycle?

• Introduction

• Growth

• Maturity

• Decline

How many components of Porter's diamond?

• 4

• 3

• 5

Comparative advantage occurs when a person or a country can produce a good or service at a lower ___ than others.

• fixed cost

• variable cost

• opportunity cost

• total cost

According to the Heckscher-Ohlin theory, what determines the products for which country will have a comparative advantage?

• Factor endowments vary among countries

• Goods different based on their resources

• Location of sales and the production location

Mercantilism supported government intervention to produce a surplus in the trade balance.

• True

• False