International Business Test 1 Ch.6

Front 1

absolute advantage

Back 1

a theory first presented by adam smith, which holds that because certain countries can produce some goods more efficiently than other countries and trade for other things they need

Front 2

acquired advantage

Back 2

a form of trade advantage due to technology rather than due to the availabilty of natural resources, climate, etc.

Front 3

comparative advantage

Back 3

theory that global efficiency gains from trade if a country specializes in those products that it can produce more efficiently than other products regardless of whether other countries can produce those products even more efficiently

Front 4

country similarity theory

Back 4

the theory that a company will seek to exploit opportunities in those countries most similar to its home country because of the perceived need to make fewer operating adjustments

Front 5

diamond of national advantage theory

Back 5

theory stating that countries usually need four conditions (demand, factors, related and supporting industries, and strategy structure and rivalry) to develop and sustain a products competitive advantage.

Front 6

factor mobility theory

Back 6

the movement of factors of production such as labor and capital from one location to another

Front 7

factor proportions theory

Back 7

theory that differences in a countrys proportionate holdings of factors or production (land,labor,capital) explain differences in the costs of the factors and that export advantages lie in the production of goods that use the most abundant factors

Front 8

favorable balance of trade

Back 8

an indication that a country is exporting more than it imports

Front 9

mercantilism

Back 9

an economic philosophy based on beleifs that a countrys wealth is dependent on its holding of treasure, usually in the form of gold, and that countries should export more than they import in order to increase wealth.

Front 10

Epinephrine Cascade

Back 10

ATP and G6P

Front 11

neomercantilism

Back 11

the approach of countries that apparently try to run favorable balances of trade in an attempt to achieve some social or political objective

Front 12

nontradeable goods

Back 12

products and services that are seldom practical to export primarily because of high transportation

Front 13

product life cycle theory

Back 13

theory that certain kinds of products go through a certain cycle consisting of 4 stages ( introduction, growth , maturity and decline) and that the location of production will shift internationally depending on the stage of the cycle

Front 14

theory of country size

Back 14

theory that larger countries are generally more self sufficient than smaller countries

Front 15

trade deficit

Back 15

a situation in which a country imports more than it exports

Front 16

trade surplus

Back 16

a situation where a country exports more than it imports

Front 17

unfavorable balance of trade

Back 17

an indication of a trade deficit that is, imports are greater than exports. also called deficit.