Question 1 

Countries with varied climates and varied natural resources generally __________ than countries with less varied climates and natural resources.

1.  have lower per capita incomes
2.  depend less on trade
3.  have more ethnic subgroups
4.  have higher endowments of capital relative to labor

Question 2   

The U.S. catfish industry petitioned the U.S. government for increased taxes on imported Vietnamese fish, claiming that the fish were being sold below the cost of production. The U.S. catfish industry was accusing the Vietnamese fish industry of __________.

1.  dumping
2.  using an embargo
3.  subsidizing
4.  using offsets

Question 3 

The comparative advantage theory holds that a country will gain from trade:

1.  when it exports products for which it has an acquired advantage and imports products for which another country has a natural advantage.
2.  if it exports goods it can produce more efficiently than other countries and imports goods other countries can produce more efficiently than it can.
3.  even though it can produce all goods more efficiently than other countries.
4.  if it exports products using its abundant production factors in exchange for products for which it has scarce production factors.

Question 4 

Which of the following groups of countries is most likely to form a regional trading group?

1.  India, Argentina, and France
2.  Canada, United States, and Mexico
3.  Brazil, Ukraine, and Japan
4.  Spain, South Africa, and Mongolia

Question 5 

Imports can stimulate exports by:

1.  redistributing the work force.
2.  curtailing domestic competition.
3.  allowing workers to have more leisure time.
4.  increasing foreign income.

Question 6 

A voluntary export restriction (VER) refers to:

1. an agreement between two countries to reciprocally restrict exports to one another.
2. requests by governments for companies to limit exports of militarily useful technology.
3. limits a government places on exports to a country with which it has a temporary trade surplus.
4. limits placed on exports by a government of an exporting country at the request of the government of an importing country.

Question 7 

Which of the following hypothetical new products, if successful, would most likely diffuse its production and sales according to the product life cycle (PLC) theory?

1. A Ferrari sports car selling for $150,000 to a niche upper-end market
2. A Sony television that can receive transmissions from anywhere in the world without a satellite dish or cable connection, introduced at a high price but targeted eventually for sale to a mass market
3. A new Coca-Cola soft drink flavored with cranberries
4. A Kyocera plastic chip carrier, which is expected to be obsolete within a year because of innovations

Question 8 

__________ integration is the political and economic agreements among countries that give preference to member countries to the agreement.

1. Global
2. Economic
3. Bilateral
4. Regional

Question 9 

Countries sometimes establish export restrictions to:

1. favor domestic consumers.
2. protect employment in the export-restricted industries.
3. lower prices in foreign markets.
4. encourage the domestic development of substitutes.

Question 10 

Assume that U.S. companies are importing the same product from Mexico and Taiwan. The United States enters into an FTA with Mexico but not with Taiwan. Consequently, the United States begins to import more goods from Mexico (due to lower tariffs) than from Taiwan, even though the Mexican 

1. trade specialization
2. trade internalization
3. trade creation
4. trade diversion