Global business chap 5.txt

  1. _____advocated that countires shouls simultaneously encourage exports and discourage imports
  2. _____was the first to explain why unrestricted free trade is benefical to a country
    Adam smiths theory
  3. The absence of govt barriers to free flow of goods and services between countries
    Free trade
  4. Theory of comparitive advantage was mae by
    David ricaro
  5. David ricardos theory was refined by?
    Eli heckscher and bertil ohlin---creating heckscher-ohlin theory
  6. The gains in international trade arise because trade allows a country to _____ in the manufacture and export of products that can be produced more efficently in other countries
  7. Makes sense for us to produce______ b/c it requires a highly skilled labor force and tech, on the other hand USshould import _____ from china b/c of efficency and cheap labor force
    Commercial jet air craft, textiles
  8. _____ and ____help explain some of the pattern of international trade
    Climate and natural resources
  9. David ricardos theory of comparitive advantage offers an explanation in terms of international differences in _________
    Labor productivity
  10. Heckscher-Ohlin theory emphasizes thhe interplay betwween the proportions in which the ___________ are available in different countries.
    Factors of productions (land, labor, capital)
  11. Economists such as nobel prize winner paul krugman devloped
    New trade theory
  12. Theory that sommetimes countries specialize in the production and export of particular products not b/c of underlying differences in factor endowments, but b/c of certain industries the world market can support only a limited number of firms
    New trade theory
  13. The first theory of international trade, with the principle assertion that gold and silver wer the mainstays of national wealth and essential to vigorous commerce
  14. An economic philosphy advocating that countires should simultaneously encourage exports and discourage imports
  15. Merchantilists saw no virtue in a large volume of trade, recommened polices to ______exports and ______ imports
    Maximize, minimize
  16. The flaw of merchantilism was that it viewed as a _______
    Zero sum game
  17. A situation in which an eonomic gain by one country results in an economic loss by another
    Zero sum gain
  18. A country has an advantage in the production of a product when it is more efficent than any other country in producing it
    Absolute advantage
  19. According to ______, countries should specialize in the production of goods for which they have an absolute advantage and then trade these for goods produced by other countries
    Smith, adam
  20. As a result of _______ and _____ output of both cocoa and rice would increased and consumers in both nations would be able to consume more
    Specialization and trade
  21. We can see that trade is a _______ it produces _____for all involved
    Positive sum game, net gains
  22. ______took adams smiths theory one step further by explorin what might happen when on country has an absolute advantag in the production of all goods
    David ricardo
  23. If a country hass absolute advantage in the production of both goods should it trade?
  24. By engaging in trade the two countries can increase their combined production and consumers in both nations can consume more of both goods by?
    A country with absolute advantage in both products needs to produce the product of comparative advantage in seperate countries
  25. The basic message of the theory of ________is that potential world production is greater with unrestricted free trade than it is with restricted trade, this theory also suggests that trade is a positve sum game in which all countries that participate realize economic gains
    Comparative advantage
  26. The units of resources required to produce a good are assumed to remain constant no matter where one is on a countys production possibility frontier
    Constant returns to specialization
  27. It is more realistic to assume dimisnishing returns for two reasons
    Not all resources are of the same quality, different goods use resources in different proportions
  28. ________show that it is not feasible for a country to specialize to the degree suggested by the simple Ricardian model, it is likely to be exhausted before specialization is complete
    Diminishing returns
  29. The simple comparitive advantage model assumed that trade does not change a country's stock of resources or the efficency with which it utilizes those resources. This static assumption makes no allowance for the ______that might result form trade
    Dynamics effects
  30. Free trade might also increase the effciency with which a country uses its ________
  31. _________looks at what happens when a rich country - the US- enters into a free trade ageement with a poor country -China- that rapidly imporves its productivity after the introduction of a free trade regime (there is a dynamic gain ini the effciency with which resources are used in the poor country)
    Paul Samuelson's Critique
  32. The message of many studies seems clear: adopt an _____economy and _____embrace free trade and you nation will be rewarded with higher economic growth rates
    Open, embrace
  33. They argued that comparative advantage arises from differences in national factor endowments
  34. The extent to which a country is endowed with such resources as land, labor, and capital
    Factor endowments
  35. ______initally propsed the product life cylce theory
    Raymond Vernon
  36. The __________was based on the wealth and size of the US market gave US firms a strong incentive to develop new consumer products. In the start of a new product, demand is starting to grow rapidly in the US and does not expand for some time. Then the market shifts to other countries
    Product life cycle
  37. Cost advantages associated with large scale production
    Economics of scale
  38. Through its impact on economics of scale, trade can increase the variety of goods available to consumers and decrease the average costs of those goods. In those industries where output required to attain economies of scale represents a significant proportion of total world demand, the global marjet may be able to support only a small number of enterprises. Thus world trade in certain products may be domoinated by countries whose firms were first movers in their production
    New trade theory
  39. Advantages accrrrruing to the first to enter a market
    First mover advantage
  40. Porters diamond theory had four broad attributes of a nation shape the environment in which local firms compete
    Factor endowments, demand conditions, relating and suppprorting industries, firm strategy-structure-and rivalry
  41. A nations position in factors ofo production such as skilled labor or the infrastructure necessary to compete in a given industry
    Factors endowments
  42. The nature of home demand for the industry's product or service
    Demand conditions
  43. The presence or absemce of supplier industries and related industries that are internationally competitive
    Relating and supporting industries
  44. The conditions governing how companies are created, organized, and managed and the nature of domestic rivarly
    Firm strategy, structure, and rivarly
  45. Porter maintains that two additional variables can influence the national diamond in important ways
    Chance and govt
  46. Three main implications for international business
    Location, first-mover advantage, govt policy
  47. How do countries' economies fain from international trade?

  48. The Heckscher-Ohlin theory:

  49. What is a possible explanation for observing the Leontief paradox?

  50. What of the following is an advantage thatnfirst mover enjoy?

  51. What was the essential task of michael porters national competitive advantage?

  52. Which of the following is best identified by saying it is the absence of govt imposed barriers to the free flow of goods and services between countires?

  53. David ricardo advanced the

  54. Climate and natural resource endowments explain why all of the following happen except

  55. The flaw with merchantilism was that it viewed trade as a

  56. According to the text, historicallynthe product life cycle theory is a(n)

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Global business chap 5.txt