134. Mercantilism viewed trade as a zero-sum game. Discuss Adam Smith’s and David
Ricardo’s stand on this view. Also discuss the phenomenon of neo-mercantilism.
135. Discuss Adam Smith’s concept of absolute advantage.
136. How does the theory of comparative advantage suggest that trade is a positive-sum
game to a greater degree than the theory of absolute advantage?
137. Discuss Paul Samuelson’s critique of free trade.
138. Describe the Leontief paradox.
139. What reasons does Raymond Vernon cite for U.S. firms basing initial production at home
and not at low-cost foreign locations?
In his product life-cycle theory, Vernon argued that most new products were initially produced in
140. Describe the shortcomings of the product life-cycle theory.
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141. Briefly describe the new trade theory.
142. Outline the relationship between economies of scale, first-mover advantages and the
pattern of trade as indicated by new trade theory.
143. Identify and briefly describe the four broad attributes that constitute Porter‘s diamond.
144. Briefly explain how demand conditions shape the environment in which local firms
compete.
145. How does Porter’s theory predict patterns in international trade? Do his predictions turn
out to be accurate in a real-world scenario?
146. From a profit perspective based on the various international theories, how would a
business go about choosing locations for its various productive activities?
147. Discuss the policy implications of Porter’s theory of national competitive advantage.