107) Porter noted a lack of attention to improving manufacturing processes and product design in
the United States He pointed to ________ as the reason for this.
A) a predominance of company leaders having finance backgrounds
B) a lack of trust between management and laborers
C) the flexible nature of competition
D) the abundance of domestic industries
E) moving too quickly to globalization
108) Porter, in his diamond model, suggested that there is a strong association between ________
and the creation and persistence of competitive advantage in an industry.
A) trade barriers
B) vigorous domestic rivalry
C) purchasing power parity
D) the availability of a captive market
E) first-mover advantages
109) Which statement reflects a pervasive finding of Porter’s study?
A) Successful industries within a country tend to be grouped into clusters of related industries.
B) Trade increases the specialization of production within an industry.
C) The pattern of trade we observe in the world economy may be the result of first-mover
advantages.
D) Purchasing power parity of a country determines its demand conditions.
E) Differences in technology may lead to differences in productivity, which in turn, drives
international trade patterns.
110) If a company were to draw from the ideas proposed in the various theories of international
trade, from a profit perspective, how would it go about selecting locations for its businesses?
A) It would concentrate its productive activities mostly in developing countries.
B) It would concentrate its productive activities in its home country.
C) It would disperse its productive activities to those countries where they can be performed most
efficiently.
D) It would disperse its productive activities across all countries that serve as its market.
E) It would concentrate its productive activities mostly in developed countries.
111) Which of the following helps a firm to preempt available demand, gain cost advantages
related to volume, and build an enduring brand ahead of later competitors?
A) monopolistic practices
B) comparative advantages
C) absolute advantages
D) first-mover advantages
E) mercantilism
112) What is meant by the term free trade? Is free trade compatible with the concept of
mercantilism?
113) Discuss how Adam Smith and David Ricardo turned the conversation and demonstrated that
trade is a positive-sum game. How has the neo-mercantilist approach viewed trade?
114) Explain the concept of absolute advantage and provide an example of this concept.
115) Describe the concept of comparative advantage and provide an example.
116) Discuss the concepts of constant returns to specialization and diminishing returns to
specialization.
117) Describe the Leontief paradox.
118) Describe the shortcomings of the product life-cycle theory in today’s trading climate.
119) Discuss the two important points of new trade theory.
120) Define economies of scale and provide an example.
121) Identify and briefly describe the four broad attributes that constitute Porter’s diamond.
122) Explain Porter’s approach to factors of production.
123) How does Porter’s theory predict patterns in international trade? Do his predictions turn out to
be accurate in a real-world scenario?
124) From a profit perspective based on the various international theories, how would a business
go about choosing locations for its various productive activities?
125) Discuss the policy implications of Porter’s theory of national competitive advantage.