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Industrial Competitiveness and Comparative Advantage: Understanding Factors that Determine Industry Success

Description: This quiz is designed to assess your knowledge of Industrial Competitiveness and Comparative Advantage, focusing on the factors that determine industry success.
Number of Questions: 15
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Tags: industrial competitiveness comparative advantage industry success economic geography
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What is the central concept of comparative advantage in international trade?

  1. Countries should specialize in producing goods where they have a lower opportunity cost.

  2. Countries should produce all goods domestically to achieve self-sufficiency.

  3. Countries should focus on exporting goods with the highest profit margins.

  4. Countries should prioritize producing goods with the lowest production costs.


Correct Option: A
Explanation:

Comparative advantage is based on the principle that countries should specialize in producing goods where they have a lower opportunity cost. This allows for more efficient allocation of resources and increased overall production.

Which of the following is NOT a determinant of industrial competitiveness?

  1. Availability of skilled labor

  2. Favorable government policies

  3. Access to natural resources

  4. Cultural preferences of consumers


Correct Option: D
Explanation:

Cultural preferences of consumers are not a determinant of industrial competitiveness, as they are not directly related to the production or distribution of goods and services.

What is the term used to describe the ability of a country to produce a good or service more efficiently than other countries?

  1. Comparative advantage

  2. Absolute advantage

  3. Competitive advantage

  4. Economic advantage


Correct Option: C
Explanation:

Competitive advantage refers to the ability of a country to produce a good or service more efficiently than other countries, allowing it to gain a stronger position in the market.

Which of the following is NOT a factor that can contribute to a country's comparative advantage?

  1. Climate and geography

  2. Availability of natural resources

  3. Technological advancements

  4. Government regulations


Correct Option: D
Explanation:

Government regulations are not a factor that directly contributes to a country's comparative advantage, as they are not related to the inherent advantages or disadvantages of a country in producing a particular good or service.

In the context of industrial competitiveness, what is the term used to describe the ability of a country to attract and retain skilled workers?

  1. Labor productivity

  2. Human capital

  3. Labor force participation

  4. Labor intensity


Correct Option: B
Explanation:

Human capital refers to the skills, knowledge, and abilities of the workforce, which are essential for industrial competitiveness and the ability to attract and retain skilled workers.

Which of the following is NOT a strategy that a country can adopt to improve its industrial competitiveness?

  1. Investing in education and training

  2. Promoting innovation and technological advancement

  3. Reducing government regulations

  4. Imposing tariffs on imported goods


Correct Option: D
Explanation:

Imposing tariffs on imported goods is not a strategy that directly improves industrial competitiveness, as it may lead to higher prices for consumers and reduced access to foreign markets.

What is the term used to describe the process by which industries evolve and adapt to changing economic conditions?

  1. Industrial restructuring

  2. Industrial modernization

  3. Industrial diversification

  4. Industrial relocation


Correct Option: A
Explanation:

Industrial restructuring refers to the process by which industries evolve and adapt to changing economic conditions, involving shifts in production, technology, and employment patterns.

Which of the following is NOT a factor that can contribute to a country's industrial competitiveness?

  1. Favorable exchange rates

  2. Access to capital and financing

  3. Political stability and security

  4. Availability of cheap labor


Correct Option: D
Explanation:

Availability of cheap labor is not a sustainable factor for industrial competitiveness, as it may lead to exploitation and poor working conditions, and can be easily undercut by other countries with even lower labor costs.

What is the term used to describe the ability of a country to produce a good or service at a lower cost than other countries?

  1. Absolute advantage

  2. Comparative advantage

  3. Competitive advantage

  4. Economic advantage


Correct Option: A
Explanation:

Absolute advantage refers to the ability of a country to produce a good or service at a lower cost than other countries, regardless of the opportunity cost.

Which of the following is NOT a benefit of industrial competitiveness?

  1. Increased economic growth

  2. Higher wages and living standards

  3. Reduced unemployment

  4. Increased environmental pollution


Correct Option: D
Explanation:

Increased environmental pollution is not a benefit of industrial competitiveness, as it can lead to negative externalities and harm the environment.

What is the term used to describe the process by which industries move from one country to another in search of lower production costs?

  1. Industrial relocation

  2. Industrial restructuring

  3. Industrial modernization

  4. Industrial diversification


Correct Option: A
Explanation:

Industrial relocation refers to the process by which industries move from one country to another in search of lower production costs, often involving the transfer of production facilities and jobs.

Which of the following is NOT a factor that can contribute to a country's comparative advantage in a particular industry?

  1. Availability of skilled labor

  2. Favorable climate and geography

  3. Government subsidies and incentives

  4. Cultural preferences of consumers


Correct Option: D
Explanation:

Cultural preferences of consumers are not a factor that directly contributes to a country's comparative advantage in a particular industry, as they are not related to the production or distribution of goods and services.

What is the term used to describe the ability of a country to produce a good or service at a higher quality than other countries?

  1. Quality advantage

  2. Competitive advantage

  3. Comparative advantage

  4. Absolute advantage


Correct Option: A
Explanation:

Quality advantage refers to the ability of a country to produce a good or service at a higher quality than other countries, allowing it to command a premium price in the market.

Which of the following is NOT a strategy that a country can adopt to improve its industrial competitiveness in a particular industry?

  1. Investing in research and development

  2. Promoting innovation and technological advancement

  3. Imposing tariffs on imported goods

  4. Providing subsidies and incentives to domestic firms


Correct Option: C
Explanation:

Imposing tariffs on imported goods is not a sustainable strategy for improving industrial competitiveness, as it may lead to higher prices for consumers and reduced access to foreign markets.

What is the term used to describe the ability of a country to produce a good or service at a lower opportunity cost than other countries?

  1. Comparative advantage

  2. Absolute advantage

  3. Competitive advantage

  4. Economic advantage


Correct Option: A
Explanation:

Comparative advantage refers to the ability of a country to produce a good or service at a lower opportunity cost than other countries, allowing it to specialize in the production of that good or service.

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