WGU C211

WGU C211

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Teacher mill Practice questions for this set Learn1 / 7Study using Learn North America, Western Europe, and Japan Deadweight CostNet losses that occurs in an economy as a result of tariffs Purchasing Power Parity (PPP)A conversion that determines the equivalent amount of goods and services different currencies can purchase. An adjustment to reflect the differences in the cost of living in various countries TriadNorth America, Western Europe, and Japan Choose an answer 1Oligopoly2Dyad 3Reserve Ratio4Triad Don't know?

Resource Based ViewAn organization's resources and capabilities, NOT external conditions, should be the basis for strategic decisions Institution Based ViewSuccess and failure are enabled and contained by institutions Open Market Operations (OMO)When the central bank buys or sells bonds Primary Political Views on FDIFree Market and Pragmatic Nationalism How do firms create value when engaging rivals? 1) Launch products in multiple markets 2) Secure patents on key products 3) Hold a dominant position in key markets Globalization can be viewed as:1) A pendulum that swings from one extreme to another from time to time 2) A new force sweeping through the world in recent times 3) A long run historical evolution since the dawn of human history Non tariff Trade Barrier (NTB)Subsidies, import quotas, export restraints, local content requirement, administrative policies and antidumping duties Free TradeThe idea that market forces should determine how much to trade with little or no government intervention Political Arguments for Free Trade1) National Security 2) Environment and Social Responsibility 3) Consumer Protection Who advocated for Comparative Advantage?David Ricardo MercantilismViews international trade as a zero sum game Modern Theories of International Trade1) Product Life Cycle 2) Strategic Trade 3) National Competitive Advantage of Industries Classical Theories of International Trade1) Mercantilism 2) Absolute Advantage 3) Comparative Advantage Modern Theory vs Classical TheoryModern = Dynamic Classical = Static Critical features of Product Life Cycle1) New 2) Maturing 3) Standardized Political Views on Foreign Direct Investment (FDI) 1) Radical 2) Free Market 3) Pragmatic Nationalism

Benefits of a country receiving FDI1) Capital inflow 2) Technology Spillover 3) Advance Management Know-How 4) Job Creation Costs to a country receiving FDI1) Loss of Sovereignty 2) Adverse effects on competition 3) Capital Outflow HedgingA transaction that protects traders and investors from exposure to the fluctuations of the spot rate Advantages with First Mover1) Proprietary 2) Technological Leadership 3) Preemption of scarce resources 4) Establishment of entry barriers 5) Avoidance of clash with dominant firms at home 6) Relationships with key stakeholders Advantages with Late Mover1) Opportunity to free ride on first mover investments 2) Resolution of technological and market uncertainty What are the three pillars1) Regulatory 2) Normative 3) Cognitive Regulatory PillarThe coercive power of governments (regulations, laws, rules) Normative PillarValues, beliefs, and actions of relevant players (norms, ethics and cultures) Cognitive PillarThe internalized taken for granted values and beliefs that guide behavior (beliefs between right/wrong) Formal InstitutionOne that includes laws, regulations and rules Informal InstitutionOne that includes norms, cultures and ethics Civil LawLaw that uses comprehensive statues and codes as a primary means to form legal judgments Common LawLaw shaped by precedents and traditions from previous judicial decisions Theocratic LawA legal system based on religious teachings Property RightThe legal rights to use an economic resource and to derive income and benefits from it Intellectual Property RightRights associated with ownership. Patents, copyrights and trademarks.

Indifference CurveCurve that shows consumption bundles that give the consumer the same level of satisfaction Properties of an Indifference Curve1) Higher indifference curves are preferred to lower ones 2) Indifference curves are downward sloping 3) Indifference curves do not cross 4) Indifference curves are bowed inward Marginal Rate of SubstitutionThe rate at which the consumer is willing to trade off one good for the other Budget ConstraintConsumption bundles that the consumer can afford Marginal CostThe increase of the total cost that arises from an extra unit of production Relation of marginal cost and total costThe portion of the total cost resulting from an extra unit of production Formula for Marginal CostChange in total cost divided by change in quantity What are the two types of Total Cost?Fixed and Variable OligopolyIndustry dominated by a small number of players Open Market OperationsThe buying and selling of government securities in the open market in order to expand or contract the amount of money in the banking system.Discount RateThe interest rate banks pay when borrowing from the Federal Reserve Reserve RatioThe fraction of total deposits that a bank holds as reserves Normal GoodGood for which an increase in income leads to an increase in demand Inferior GoodGood for which an increase in income leads to a decrease in demand Factors that influence the position of the demand curve 1) Price of the good itself 2) Income 3) Price of related goods 4) Tastes 5) Expectations 6) Number of Buyers TariffTax on goods produced abroad and sold domestically - method used to restrict international trade Dead Weight LossFall in total surplus that results from a market distortion such as a tax Consumer SurplusThe difference between the amount a buyer is willing to pay for a good or service and the total amount they actually pay