BUSAD 101 - Introduction to Business » Spring 2020 » Chapter 4 Quiz

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Question #1
A country raises the tariff on imported cheese in order to increase its price above the price of domestically produced cheese. This is an example of ________.
A.   a protective tariff
B.   an exchange control
C.   an import quota
D.   dumping
Question #2
Many developing nations have lower per capita incomes than highly developed countries. This fact ________.
A.   means that the developing nations are unlikely to experience much economic growth
B.   does not mean there is little opportunity for sales
C.   indicates that they represent an insignificant market for most products
D.   means that they are only likely to purchase low-tech merchandise
Question #3
Which of the following countries has the highest per-capita GDP?
A.   United Arab Emirates
B.   Brunei
C.   United States
D.   Qatar
Question #4
Which of the following statements is true regarding comparative advantage?
A.   Every country possesses an absolute advantage.
B.   A nation must first possess an absolute advantage in a particular area before it can gain a comparative advantage.
C.   Comparative advantage is becoming rarer these days.
D.   Developing countries possess no comparative advantage.
Question #5
The United States has a trade surplus with which of the following items?
A.   oil
B.   textiles
C.   services
D.   technology products
Question #6
Which of the following groups is likely to be hurt economically if the value of the U.S. dollar rises relative to the euro?
A.   American tourists visiting Europe
B.   American firms with euro-dominated loans
C.   American farmers exporting goods to Europe
D.   European firms exporting goods to the United States
Question #7
A less-developed country wants to build new port facilities, which will allow it to increase agricultural exports. Financing for this project could come from the ________.
A.   World Trade Organization
B.   World Bank
C.   International Monetary Fund
D.   United Nations
Question #8
Which of the following statements is true of subcontracting?
A.   Subcontracting is not an option for mail-order companies.
B.   Subcontracting uses subcontractors who have limited knowledge of a company's local culture.
C.   Subcontracting usually results in high import duties and labor costs.
D.   Subcontracting can unintentionally result in child labor or other unethical business practices.
Question #9
Assume a nation has a comparative advantage in the production of clothing. If the value of this country’s currency rises, ________.
A.   its comparative advantage will stay the same
B.   its comparative advantage will decrease
C.   its comparative advantage will increase
D.   an absolute advantage will be created

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