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WorksheetsInternational Trade Theory Quiz
Total questions: 10
Worksheet time: 5mins
Which theory suggested that comparative advantage arises from differences in national factor endowments?
Comparative Advantage
Heckscher-Ohlin
Absolute Advantage
Mercantilism
Porter’s diamond of competitive advantage includes all of the following except
Firm strategy, structure, and rivalry
Demand conditions
Factor endowments
First-mover advantages
_________ refer to the nature of home demand for the industry’s product or service.
Demand conditions
Related and supporting industries
Factor endowments
Firm strategy, structure, and rivalry
What is the theory that suggests a country should maintain a trade surplus and views trade as a zero-sum game?
Heckscher-Ohlin
Comparative Advantage
Absolute Advantage
Mercantilism
According to Adam Smith's theory of absolute advantage, a country should specialize in producing goods for which it has:
Least resources
A comparative advantage
No resources
An absolute advantage
Which theory predicts that countries will export goods that make intensive use of locally abundant factors and import goods that make intensive use of locally scarce factors?
Heckscher-Ohlin
Comparative Advantage
Absolute Advantage
Mercantilism
The product life-cycle theory suggests that as products mature, the location of sales and optimal production location will change, affecting the flow and direction of trade. True or False?
True
False
Cannot say
Partially true
What does Porter's Diamond Theory identify as one of the attributes that promote or impede the creation of competitive advantage?
Low factor endowments
Lack of demand
structure of the firm
Absence of rivalry
Which theory explains why a nation achieves international success in a particular industry based on factors like factor endowments, demand conditions, and firm strategy?
Mercantilism
Absolute Advantage
Comparative Advantage
Porter's Diamond Theory
According to the product life-cycle theory, what changes as products mature, affecting the flow and direction of trade?
Location of sales
Optimal production location
Both A and B
None of the above
