Multinational Business Finance 15th Global Edition by David K. Eiteman test bank

 
3) Which of the following factors of production DO NOT flow freely between countries?
A) raw materials
B) financial capital
C) (non-military) technology
D) All of the above factors of production flow freely among countries.
Answer:  A
Diff: 1
L.O.:  1.2 The Theory of Comparative Advantage
Skill:  Recognition
AACSB:  Application of knowledge
 
4) Which of the following would NOT be a way to implement comparative advantage?
A) IBM exports computers to Egypt.
B) Computer hardware is designed in the United States but manufactured and assembled in Korea.
C) Water of the greatest purity is obtained from wells in Oregon, bottled, and exported worldwide.
D) All of the above are examples of ways to implement comparative advantage.
Answer:  D
Diff: 2
L.O.:  1.2 The Theory of Comparative Advantage
Skill:  Conceptual
AACSB:  Application of knowledge
 
5) Of the following, which would NOT be considered a way that government interferes with comparative advantage?
A) tariffs
B) managerial skills
C) quotas
D) other non-tariff restrictions
Answer:  B
Diff: 1
L.O.:  1.2 The Theory of Comparative Advantage
Skill:  Recognition
AACSB:  Application of knowledge
 
6) The concept of absolute comparative advantage's origins lie in:
A) Adam Smith's work of 1776.
B) David Ricardo's work of 1776.
C) The Wealth of Nations book, published in 1887.
D) On the Principles of Political Economy and Taxation book, published in 1817.
Answer:  A
Diff: 3
L.O.:  1.2 The Theory of Comparative Advantage
Skill:  Recognition
AACSB:  Application of knowledge
 
7) The concept of relative comparative advantage's origins lie in:
A) Adam Smith's work of 1776.
B) David Ricardo's work of 1776.
C) The Wealth of Nations book, published in 1887.
D) On the Principles of Political Economy and Taxation book, published in 1817.
Answer:  D
Diff: 3
L.O.:  1.2 The Theory of Comparative Advantage
Skill:  Recognition
AACSB:  Application of knowledge
 
8) Comparative advantage is one of the underlying principles driving the growth of global business.
Answer:  TRUE
Diff: 1
L.O.:  1.2 The Theory of Comparative Advantage
Skill:  Recognition
AACSB:  Application of knowledge
 
9) The theory of comparative advantage owes it origins to Ben Bernanke as described in his book The Wealth of Bankers.
Answer:  FALSE
Diff: 1
L.O.:  1.2 The Theory of Comparative Advantage
Skill:  Recognition
AACSB:  Application of knowledge
 
10) International trade might have approached the comparative advantage model in the 19th century, and it does so even more today.
Answer:  FALSE
Diff: 2
L.O.:  1.2 The Theory of Comparative Advantage
Skill:  Recognition
AACSB:  Application of knowledge
 

11) Comparative advantage shifts over time as less developed countries become more developed and realize their latent opportunities.
Answer:  TRUE
Diff: 2
L.O.:  1.2 The Theory of Comparative Advantage
Skill:  Recognition
AACSB:  Application of knowledge
 
12) Comparative advantage in the 21st century is based more on services and their cross border facilitation by telecommunications and the Internet.
Answer:  TRUE
Diff: 1
L.O.:  1.2 The Theory of Comparative Advantage
Skill:  Recognition
AACSB:  Application of knowledge
 
13) Comparative advantage was once the cornerstone of international trade theory, but today it is archaic, simplistic, and irrelevant for explaining investment choices made by MNEs.
Answer:  FALSE
Diff: 2
L.O.:  1.2 The Theory of Comparative Advantage
Skill:  Recognition
AACSB:  Application of knowledge
 
14) When discussing comparative advantage, it is apparent that today at least two of the factors of production, capital and technology, now flow directly and easily between countries, rather than only indirectly through traded goods and services.
Answer:  TRUE
Diff: 1
L.O.:  1.2 The Theory of Comparative Advantage
Skill:  Recognition
AACSB:  Application of knowledge
 
15) It would be safe to make the statement that modern telecommunications now take business activities to labor rather than moving labor to the places of business.
Answer:  TRUE
Diff: 1
L.O.:  1.2 The Theory of Comparative Advantage
Skill:  Conceptual