Chapter 5 Trade Theory

Question 1

DHL’s global logistics dominance demonstrates:

Accepted Answer

First-mover advantage

Question 2

Yellow Hat benefits of comparative advantage:

Accepted Answer

Higher global efficiency

Question 3

A company moving production to low-cost countries aligns with:

Accepted Answer

International Product Life Cycle

Question 4

Porter’s Diamond includes all EXCEPT:

Accepted Answer

Trade deficits

Question 5

Red Hat analysis of mercantilism might highlight:

Accepted Answer

Colonies’ resentment of exploitation

Question 6

Blue Hat links factor proportions theory to:

Accepted Answer

Outsourcing decisions

Question 7

The “first-mover advantage” is key to:

Accepted Answer

New Trade Theory

Question 8

Which theory focuses on labor vs. land/capital abundance?

Accepted Answer

Factor Proportions

Question 9

True/False: Governments never intervene in trade under absolute advantage.

Accepted Answer

False

Question 10

True/False: Comparative advantage suggests trading even if you’re worse at producing everything.

Accepted Answer

True

Question 11

Mercantilism encourages countries to:

Accepted Answer

Accumulate gold through exports

Question 12

Which theory best explains China’s rise as a manufacturing hub?

Accepted Answer

Factor Proportions

Question 13

Green Hat for International Product Life Cycle could suggest:

Accepted Answer

Using 3D printing to skip the “mature” phase

Question 14

Which hat focuses on flaws?

Accepted Answer

Black

Question 15

Leontief Paradox contradicts predictions of:

Accepted Answer

Factor Proportions Theory

Questions 15