AGB 302 Quiz 3 | Questions with 100% Correct Answers | Updated & Verified, Exams of Community Corrections

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AGB 302 Quiz 3 | Questions with 100% Correct

Answers | Updated & Verified

1. refers to a situation where a government does not attempt to influence through quotas or duties

what its citizens can buy from another country - Correct answer free trade

2. argued that countries should specialize in the production of goods for which they have an

absolute advantage. - Correct answer Adam Smith

3. The theory of comparative advantage suggests that trade is a game in which all countries that

participate realize economic gains - Correct answer positive-sum

4. The _________ argues that a large proportion of the world's new products had been developed

by U.S. firms. - Correct answer product life-cycle theory

5. are unit cost reductions associated with a large scale of output - Correct answer Economies

of scale

6. refers to a situation where a government does not attempt to influence through quotas duties

what its citizens can buy from another country - Correct answer Free trade

7. David Ricardo's theory of comparative advantage explains global trade in terms of the: -

Correct answer International differences in labor productivity

8. the following is a theory that can be used to justify limited government intervention to support the

development of certain export-oriented industries? - Correct answer New trade theory

9. A country has an absolute advantage in the production of a product when it: - Correct answer

is more efficient than any other country

10. According to Ricardo's theory of comparative advantage, a country should produce goods -

Correct answer that it produces most efficiently.

11. are levied as a proportion of the value of the imported good - Correct answer Specific tariffs

12. A(n) ______________ helps domestic producers to compete against foreign imports - Correct

answer import quota

13. A company that sells its product in a foreign market below the cost of production may be accused

of - Correct answer dumping

14. According to the infant industry argument, many developing countries have a potential _______________ in manufacturing, but new manufacturing industries cannot initially compete

with established industries in developed countries - Correct answer comparative advantage

15. Strategic trade policy suggests that a government should use __________ to support promising

firms that are active in newly emerging industries - Correct answer subsidies

16. Krugman has suggested that trade policy designed to retaliate against another country's trade

policy would - Correct answer hurt the citizens of both countries.

17. A key issue in the "millennium round" of the WTO was to: - Correct answer further reduce

barriers to cross-border trade and investment.

18. WTO rules allow countries to __________ foreign goods that are being sold cheaper than at home, or below their cost of production, even when domestic producers can show that they are

being harmed. - Correct answer place countervailing duties on

19. Inadequate protections for intellectual property: - Correct answer reduce the incentive for

innovation.

20. Many firms, of all national origins increasingly depend on ____________ for their competitive

advantage. - Correct answer globally dispersed production systems