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REVIEW QUESTIONS

7 December, 2015 - 11:04

(1) Briefly explain the Principle of One Price, the Principle of Declining Share of Foreign Trade, and the Principle of Concentration.
(2) What are some important considerations in determining which production location will minimize total costs?
(3) List and briefly explain the main theories of international trade in standardized products.
(4) What are the main differences between the concepts of absolute and relative comparative advantage?
(5) List and briefly explain the main theories of international trade in a new product.
(6) Explain the Product Life Cycle Theory as it applies to raw materials.
(7) What are the main forms and some benefits of economic integration?
(8) Show how tariffs and quotas have the same effect on imports.
(9) Some economists might argue that the United States has not lost its competitiveness, as its percentage of world trade increased from 12.2% in 1983 to 1 3. 7% in 1 985. Defend or refute that argument.
(10) Explain why the percentage of the U.S. GDP for 1 985 devoted to international business was actually closer to 2 5 % than to the 9% shown in Figure 7.7.