Freight Forwarding 1 multiple choice day 2

An economic theory that holds that nations will trade with one another as long as they can produce certain goods relatively more efficiently than one another is called a .

 

• Complete Advantage

• Constant Advantage

• Compatible Advantage

• Comparative Advantage

If the United Kingdom has an Absolute Advantage in the production of Wheat and Machinery over Brazil, why would they trade with them?

 

• Because Brazil specializes in wheat production where it is more efficient

• The UK shift to the manufacturing of machinery where they are more efficient

• By trading with Brazil the UK gets more wheat to consume and maintains their level of machinery they need domestically

• All of the above

Ford Motor Company produces cars and has the ability to manufacture steel, aluminum and airbags, but buys them from outside manufacturers.  Even though they have a Comparative Advantage why do they chose to buy from these other companies? 

 

• Ford can layoff high cost labor

• Ford can focus on auto production

• The other companies can produce them relatively more efficiently

• Both A and C

• Both B and C

When a country has a Comparative Advantage over other countries with a greater abundance of one of the factors of economic production this theory is called the .

 

• Factor Engagement

• X Factor

• Factor Endowment

• Factor Endorsements

  Factor Endowment is based on comparing the effectiveness of a country at using its .

 

• Ability to reduce cost

• Labor to produce the goods

• Ability to charge a higher price

• Labor for value added services

Under the Factor Endowment Theory is Japan better at producing cars over rice?

 

• Japan has an abundance of capital

• Japan lacks the available land to efficiently produce rice

• Japan has an aging work force

• All of the above

Under the Factor Endowment Theory Argentina has a thriving cattle and beef industry because they have an abundance of .

 

• Cows

• Grazing Land

• Clean Energy

• Slaughter Houses

Under the economic theory of International Product Life Cycle; a product over its life cycle will be .

 

• Will become obsolete

• Manufactured in different countries

• Manufactured domestically for a minimum  of 10 years

• Recycled to save the environment

When a company creates a new product to satisfy the market needs and will take place in a developed country where the number of customers; necessary for a new product launch are available is of a products life cycle.

 

• Initial Stage

• Stage I

• Stage II

• Stage left

In Stage II of a products life cycle sales in other developed countries start to grow and local competitors see that there are enough to justify the production of the product that imitate the original product.

 

• Raw Materials

• Skilled labor

• Customer

• Transportation