Which of the Following Was an Important Factor in Boosting

question 53

Multiple Choice

Which of the following was an important factor in boosting sales of Japanese cars during the 1970s?

• A) the United States' comparative advantage in auto production
• B) a shortage of U.S. cars at dealerships
• C) the higher prices of Japanese cars compared to U.S. autos
• D) the U.S. manufacturers' slow response to pressures to produce smaller cars
• E) Japanese agreements to voluntary restrictions rather than quotas on their auto exports to the United States

Understand the mechanisms of trade, including exporting, importing, and countertrade.

Distinguish between different methods companies use to navigate trade barriers.

Grasp the economic indicators, including GDP growth, trade balances, and exchange rates, and their relevance to international trade.

Acknowledge the regulatory and economic environments that businesses operate in globally, including adherence to local regulations by foreign companies.

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Definitions:

Network Externalities

Benefits or detriments to a product's value that result from the number of users the product has.

Negative Network Externalities

Adverse effects on a user of a product or service because the number of other users is too large or incompatible in some way.

Snob Effect

A phenomenon where the demand for a particular good increases as the price increases because the good is perceived as exclusive or high-status.

Pure Price Effect

The impact on consumer demand and behavior resulting solely from a change in the price of a good or service, with income and substitution effects considered separately.