Exam 1 Sol
Exam 1
1. Country A is extremely efficient in the mining of tin. However, its climate and terrain makes it difficult to produce corn. According to the theory of comparative advantage, Country A should: concentrate its production on tin and buy corn from an efficient producer.
2. Climate and terrain in several South American countries are conducive to growing coffee efficiently. While other countries can grow coffee, they are not as efficient and effective at coffee growing because of short seasons and climate concerns. This fact would lead you to believe that South American countries have a (n) __________ advantage in the production of coffee. comparative 3. The only deposits of a rare and sought after mineral known as Yuksporite are found in Russia. Since no other nation has deposits of Yuksporite, Russia has a(n) ___________ in this mineral.
Absolute advantage
4. A major advantage of licensing is: very little cost to the licensor.
5. Licensing is a popular strategy because
The licensee has incentive to work hard and succeed because he/she has borne the cost.
6. Due to a nation's weak currency, people may have to fall back on ___________.
Batering
7. A Mexican firm has agreed to trade petroleum to an American importer in return for U.S. made computers. This arrangement is an example of: barter 8. The Ozark Bike Company recently entered into an agreement with a large Japanese retailer to distribute its bicycles in Japan. Ozark Bike Company sees itself in a favorable position because: the yen is gaining strength compared to the U.S. dollar making it cheaper for Japanese customers to buy U.S. products.
9. The two basic types of tariffs are:
Revenue and protective
10. A ________ tariff is designed to raise the price of imported products so that domestic goods are more competitively priced.
Protective
11. ________ tariffs are designed to raise money for the government.
Revenue
12. Having recently found sources of oil on their own land, the infant nation of Lancerland
1. Country A is extremely efficient in the mining of tin. However, its climate and terrain makes it difficult to produce corn. According to the theory of comparative advantage, Country A should: concentrate its production on tin and buy corn from an efficient producer.
2. Climate and terrain in several South American countries are conducive to growing coffee efficiently. While other countries can grow coffee, they are not as efficient and effective at coffee growing because of short seasons and climate concerns. This fact would lead you to believe that South American countries have a (n) __________ advantage in the production of coffee. comparative 3. The only deposits of a rare and sought after mineral known as Yuksporite are found in Russia. Since no other nation has deposits of Yuksporite, Russia has a(n) ___________ in this mineral.
Absolute advantage
4. A major advantage of licensing is: very little cost to the licensor.
5. Licensing is a popular strategy because
The licensee has incentive to work hard and succeed because he/she has borne the cost.
6. Due to a nation's weak currency, people may have to fall back on ___________.
Batering
7. A Mexican firm has agreed to trade petroleum to an American importer in return for U.S. made computers. This arrangement is an example of: barter 8. The Ozark Bike Company recently entered into an agreement with a large Japanese retailer to distribute its bicycles in Japan. Ozark Bike Company sees itself in a favorable position because: the yen is gaining strength compared to the U.S. dollar making it cheaper for Japanese customers to buy U.S. products.
9. The two basic types of tariffs are:
Revenue and protective
10. A ________ tariff is designed to raise the price of imported products so that domestic goods are more competitively priced.
Protective
11. ________ tariffs are designed to raise money for the government.
Revenue
12. Having recently found sources of oil on their own land, the infant nation of Lancerland