Question : Multiple Choice Questions 41.Which of the following terms best represents a : 1299287

Multiple Choice Questions

41.Which of the following terms best represents a situation in which a government does not attempt to influence through quotas or duties what its citizens can buy from another country, or what they can produce and sell to another country? 

A. Free trade

B. Positive-sum game

C. Socialism

D. Absolute advantage

E. Zero-sum game

42.Sentoria is an island nation in the Pacific ocean. It’s geographical location is advantageous since it has access to a variety of aquatic life forms and also a number of fresh water sources that provide for fisheries. The lack of arable land drives local demand for seafood. The competition in the domestic fishing industry is fierce and enables Sentoria to be one of the major exporters of seafood. Which of the following theories of international trade best explains Sentoria’s dominance as an exporter of seafood? 

A. New trade theory

B. Product life-cycle theory

C. Mercantilism

D. Heckscher-Ohlin theory

E. Theory of national competitive advantage

43.Which of the following factors is taken into consideration by David Ricardo’s theory of comparative advantage in order to explain the pattern of international trade? 

A. Absolute advantage of a country with reference to natural resources

B. The proportions in which the factors of production are available

C. International differences in labor productivity

D. Specialization in the production of particular products

E. The ability of firms to capture first mover advantages

44.Salcia is a country that depends heavily on domestic products. The Salcian government decides on the products that can be imported and ensures that any product that can be produced at home is not imported. A major part of Salcia’s trade is concentrated on exporting agricultural produce and textiles. Which of the following influences Salcia’s approach to international trade? 

A. Mercantilism

B. Leontief’s paradox

C. Product life-cycle theory

D. New trade theory

E. Neo-Ricardian trade theory

45.The argument for unrestricted free trade is that both import controls and export incentives:  

A. help firms build a competitive advantage that is subsequently difficult to challenge.

B. help firms to capture first-mover advantages.

C. imply that a laissez-faire stance toward trade is in the best interests of a country.

D. are self-defeating and result in wasted resources.

E. are not in line with principles of mercantilism.

46._____ advocated that countries should simultaneously encourage exports and discourage imports.  

A. Ethnocentrism

B. Capitalism

C. Collectivism

D. Mercantilism

E. Socialism

47.Which of the following is in a country’s best interests according to the main tenet of mercantilism? 

A. Importing products from developing rather than developed countries

B. Importing products even if they are efficiently produced at home

C. Importing less specialized goods rather than attempting to make them at home

D. Minimizing exports and maximizing imports

E. Maintaining a trade surplus

48.Considered to be the first theory of international trade, the principal assertion of mercantilism is that:  

A. countries differ in their ability to produce goods efficiently.

B. gold and silver are the mainstays of a country’s wealth and essential to vigorous commerce.

C. countries should specialize in the production of goods for which they have an absolute advantage.

D. differences in labor productivity between nations underlie the notion of comparative advantage.

E. resources can move freely from the production of one good to another within a nation.

49.Which of the following is consistent with the central beliefs of mercantilism? 

A. A country’s government should intervene to achieve a surplus in the balance of trade.

B. A large volume of trade is essential regardless of whether it comes from imports or exports.

C. Trade is a positive-sum game in which all countries benefit from trading with each other.

D. A country that has an absolute advantage in the production of all goods derives no benefits from international trade.

E. Potential world production is greater with unrestricted free trade than it is with restricted trade.

50.The Republic of Argonia, owing to it’s vast resources of arable land and fresh water, is an agrarian nation. It exports agricultural products and in turn imports products that it does not produce such as oil, machinery, computers, and electronic devices. The result is that it spends more on imports than what it gains from exports. Which of the following theories prohibits such international trade? 

A. New trade theory

B. Product life-cycle theory

C. Mercantilism

D. Heckscher-Ohlin theory

E. Theory of national competitive advantage