Exam_2_Study_Questions_Spring_2008 - CH 5: What are the...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
What are the major theories of trade, both country-based and firm-based? How well do these theories perform in explaining inter-industry trade and intra-industry trade? Free Trade – The absence of government-imposed barriers, such as quotas or duties, that impede the free flow of goods and services between countries. Mercantilism – The economic philosophy advocating that countries should simultaneously encourage exports and discourage imports. Zero-Sum Game – A situation in which a gain by one country results in a loss by another. Absolute Advantage – When one country is more efficient than any other country in producing a particular product. Focused on exporting products in which the country is more productive. It doesn’t explain what happens if a country has an absolute advantage in both products. Comparative Advantage – Focus on products in which the country has a relative advantage. Incorporates opportunity cost and production possibilities. Doesn’t address sources of advantage. What are Porter’s guidelines for increasing competitiveness, and therefore, exports? o Factor conditions – a nation’s position in factors of production such as skilled labor or the infrastructure necessary to compete in a given industry o Demand conditions – the nature of home demand for the industry’s product or service o – the presence or absence of supplier industries and related industries that are internationally competitive o Firm strategy, structure and rivalry – the conditions governing how companies are created, organized, and managed and the nature of domestic rivalry o Innovation is the key CH 6: What are the two primary questions associated with trade policy? Should government intervene? What are the primary instruments of trade policy (both tariff and non-tariff barriers) and what are their effects? o
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/07/2008 for the course MGT 423 taught by Professor Stewart during the Spring '08 term at Clemson.

Page1 / 5

Exam_2_Study_Questions_Spring_2008 - CH 5: What are the...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online