Exam 9: International Factor Movements and Multinational Enterprises

What particular aspects of multinational operations generate potential conflict?

Concerning the decision of a U.S.resident to lend or invest abroad, Zimbabwe and Sudan have recently been considered to be relatively safe investments regarding the risk of default.

Mergers differ from joint ventures in that they involve the creation of a new business firm, rather than the union of two existing companies.

A U.S.firm is deciding on whether or not to build a production facility in Montenegro.All else equal, if Montenegro has a very low foreign debt as a percentage of GDP, it therefore has relatively low

Horizontal integration would occur if General Motors sets up a subsidiary in Mexico to produce automobiles identical to those that it produces in the United States.

Figure 9.1 illustrates the market conditions facing SKF and Timken, initially operating as competitors in the domestic ball bearing market. Each firm realizes constant long-run costs, MC₀=AC₀. Figure 9.1. International Joint Venture -Consider Figure 9.1.Compared to the market equilibrium position achieved by SKG and Timken as competitors, Venture Company as a monopoly leads to a deadweight welfare loss at

If a joint venture among competing firms is able to cut costs by extracting wage concessions from domestic workers, national welfare increases.

The largest share of U.S.direct investment abroad has recently gone to

Which of the following do American labor unions NOT accuse U.S.multinational firms of?

Concerning the decision by an American to lend or invest abroad, which of the following countries is generally considered to be the least risky?

Joint ventures lead to national welfare gains if the newly established business yields productivity increases that would have been unavailable if each parent performed the same function separately.

Suppose that Samsung's production costs are the same in both China and India.Also suppose that Samsung can produce cellphones in China for an average cost of $10 per phone for 300 million phones, $12 per phone for 200 million phones, and $15 per phone for 100 million phones.If customers in India demand 100 million phones and customers in China demand 200 million phones, and there is an Indian tariff of $10 per phone, Samsung's lowest cost option is to

There is virtually universal agreement among economists that foreign direct investment in the United States has reduced the economic welfare of the average U.S.citizen.

The least common type of migration pattern is for people to migrate permanently from

Figure 9.3 Figure 9.3 represents the Mexican labor market. Assume that labor and capital are the only factors of production. Also assume the initial supply schedule of labor is denoted by S0 and consists entirely of native Mexican workers. The demand schedule of labor is denoted by DMexico. -Consider Figure 9.3.If Honduran migration to Mexico results in the labor force increasing to 12 workers, denoted by labor supply curve S₁, the:

Developing countries, such as China and India, have historically closed their borders to foreign companies unless they are willing to take on partner companies in developing countries.