C211 Global Economics for Managers Practice Questions - Set 5 - Part 3

Test your knowledge of Global Economics for Managers concepts with these practice questions. Each question includes detailed explanations to help you understand the correct answers.

Question 41: What is the primary purpose of a tariff?

a) To promote free trade

b) To raise revenue for exporters

c) To protect domestic industries by making imports more expensive

d) To increase the demand for imports

Question 42: What economic concept refers to the extent of similarity or dissimilarity between regulatory, normative, and cognitive institutions of two countries?

a) Institutional proximity

b) Regulatory alignment

c) Institutional distance

d) Cultural proximity

Question 43: What is the economic principle that assumes a resource can be used in producing a product for one industry and then shifted to another industry?

a) Comparative advantage

b) Resource mobility

c) Factor endowment

d) Product life cycle theory

Question 44: What is the main factor that determines a firm's ownership advantage in foreign direct investment (FDI)?

a) Price competitiveness

b) Strategic location

c) The possession of valuable, rare, and inimitable resources

d) Government subsidies

Question 45: What economic theory suggests that nations should export goods they can produce efficiently and import goods that other nations can produce more efficiently?

a) Comparative advantage

b) Absolute advantage

c) Protectionism

d) Factor endowment theory

Question 46: What is the effect called when the price of one good rises, leading to a decrease in the demand for its complementary good?

a) Cross-price elasticity

b) Substitution effect

c) Complementary effect

d) Demand elasticity

Question 47: What is the measure of the responsiveness of quantity demanded to a change in income?

a) Price elasticity of demand

b) Cross-price elasticity

c) Income elasticity of demand

d) Marginal propensity to consume

Question 48: What term refers to an international agreement that shows exporting countries voluntarily agree to restrict their exports?

a) Import quota

b) Trade embargo

c) Voluntary export restraint (VER)

d) Tariff agreement

Question 49: What is the economic principle that assumes a resource can be used in producing a product for one industry and then shifted to another industry?

a) Comparative advantage

b) Resource mobility

c) Factor endowment

d) Product life cycle theory

Question 50: What term describes the measure of value added to goods and services by resident firms, households, and governments operating in an economy?

a) Gross National Product (GNP)

b) Gross Domestic Product (GDP)

c) Net National Product (NNP)

d) Value Added Tax (VAT)

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