Question 1

All of the following may be exit barriers EXCEPT

Accepted Answer

A)  employee health benefit costs. 
B)  treatment, storage and disposal costs. 
C)  penalties for terminating contracts with raw material suppliers. 
D)  increasing opportunity cost of production. 
A)  employee health benefit costs. 
B)  treatment, storage and disposal costs. 
C)  penalties for terminating contracts with raw material suppliers. 
D)  increasing opportunity cost of production.

Question 2

Which is NOT a relatively mobile occupation, as these skills are rarely used in businesses?

Accepted Answer

A)  accountant 
B)  doctor 
C)  lecturer 
D)  farmer 
A)  accountant 
B)  doctor 
C)  lecturer 
D)  farmer

Question 3

Ricardo's theory of comparative advantage does NOT take into account demand conditions when determining relative commodity prices.

Accepted Answer

A) True 
 B)False

Question 4

With constant opportunity costs, a nation will achieve the greatest possible gains from trade if it partially specializes in the production of the commodity of its comparative disadvantage.

Accepted Answer

A) True 
 B)False

Question 5

If Canada produces computers at a lower relative cost than Germany, Canada is said to have a comparative disadvantage in computers.

Accepted Answer

A) True 
 B)False

Question 6

According to Ricardo, a country will have a comparative advantage in the product in which its

Accepted Answer

A)  labor productivity is relatively low. 
B)  labor productivity is relatively high. 
C)  labor mobility is relatively low. 
D)  labor mobility is relatively high. 
A)  labor productivity is relatively low. 
B)  labor productivity is relatively high. 
C)  labor mobility is relatively low. 
D)  labor mobility is relatively high.

Question 7

Which of the following trade theories asserts that within the outer limits of the terms of trade, the actual terms of trade is determined by the relative strength of each country's demand for the other country's product?

Accepted Answer

A)  theory of reciprocal demand 
B)  overlapping demand theory 
C)  theory of income determination 
D)  theory of negative externalities 
A)  theory of reciprocal demand 
B)  overlapping demand theory 
C)  theory of income determination 
D)  theory of negative externalities

Question 8

Which is an efficiency gain provided by the Internet?

Accepted Answer

A)  eliminates competition 
B)  increases cost 
C)  increases market 
D)  minimizes collaboration 
A)  eliminates competition 
B)  increases cost 
C)  increases market 
D)  minimizes collaboration

Question 9

Discuss the pitfalls of outsourcing, especially as experienced by Boeing.

Accepted Answer

Boeing outsourced its production capabil

Question 10

A country with high wages can export to a country with low wages, given sufficiently high labor productivity in the exporting country.

Accepted Answer

A) True 
 B)False

Question 11

Analysts widely agree that Boeing's use of production outsourcing for its 787 has been highly successful in generating greater efficiencies in jetliner production.

Accepted Answer

A) True 
 B)False

Question 12

If Hong Kong and Taiwan had identical labor costs but were subject to increasing costs of production,

Accepted Answer

A)  trade would depend on differences in demand conditions. 
B)  trade would depend on economies of large-scale production. 
C)  trade would depend on the use of different currencies. 
D)  there would be no basis for gainful trade. 
A)  trade would depend on differences in demand conditions. 
B)  trade would depend on economies of large-scale production. 
C)  trade would depend on the use of different currencies. 
D)  there would be no basis for gainful trade.

Question 13

When a nation is in autarky and maximizes its living standard, its consumption and production points are

Accepted Answer

A)  along the production possibilities frontier. 
B)  above the production possibilities frontier. 
C)  beneath the production possibilities frontier. 
D)  beside the production possibilities frontier. 
A)  along the production possibilities frontier. 
B)  above the production possibilities frontier. 
C)  beneath the production possibilities frontier. 
D)  beside the production possibilities frontier.

Question 14

Referring to the textbook's example of Babe Ruth, Ruth switched from being a pitcher to being an outfielder and batter because of the

Accepted Answer

A)  principle of absolute advantage. 
B)  principle of comparative advantage. 
C)  desire to be a mercantilist. 
D)  concept of economies of scale. 
A)  principle of absolute advantage. 
B)  principle of comparative advantage. 
C)  desire to be a mercantilist. 
D)  concept of economies of scale.

Question 15

Today, about ______ percent of a typical Ford vehicle comes from parts, components, and services purchased from external suppliers, many of which are outside of the United States.

Accepted Answer

A)  5 
B)  15 
C)  35 
D)  70 
A)  5 
B)  15 
C)  35 
D)  70

Question 16

Assume 1990 to be the base year.If by the end of 2004 a country's export price index rose from 100 to 130 while its import price index rose from 100 to 115, its terms of trade would equal 113.

Accepted Answer

A) True 
 B)False

Question 17

The theory of reciprocal demand does NOT well apply when one country

Accepted Answer

A)  produces under constant-cost conditions. 
B)  produces along its production possibilities frontier. 
C)  is of minor economic importance in the world marketplace. 
D)  partially specializes the production of its export good. 
A)  produces under constant-cost conditions. 
B)  produces along its production possibilities frontier. 
C)  is of minor economic importance in the world marketplace. 
D)  partially specializes the production of its export good.

Question 18

When a worker quits from a steel company and joins an automobile firm, what factor of mobility does this come under?

Accepted Answer

A)  movement of factors of production between firms within an industry 
B)  movement of factors of production across industries 
C)  movement of factors of production between countries within an industry 
D)  movement of factors of production between countries across industries 
A)  movement of factors of production between firms within an industry 
B)  movement of factors of production across industries 
C)  movement of factors of production between countries within an industry 
D)  movement of factors of production between countries across industries

Question 19

The MacDougall study of comparative advantage hypothesized that in those industries in which U.S.labor productivity was relatively high, U.S.exports to the world should be lower than U.K.exports to the world, after adjusting for wage differentials.

Accepted Answer

A) True 
 B)False

Question 20

Figure 2.2. Canadian Trade Possibilities
​   ​
-Referring to Figure 2.2, Canada has a comparative advantage in

Accepted Answer

A)  televisions. 
B)  refrigerators. 
C)  televisions and refrigerators. 
D)  neither televisions nor refrigerators. 
A)  televisions. 
B)  refrigerators. 
C)  televisions and refrigerators. 
D)  neither televisions nor refrigerators.

All of the following may be exit barriers EXCEPT

Which is NOT a relatively mobile occupation, as these skills are rarely used in businesses?

Ricardo's theory of comparative advantage does NOT take into account demand conditions when determining relative commodity prices.

With constant opportunity costs, a nation will achieve the greatest possible gains from trade if it partially specializes in the production of the commodity of its comparative disadvantage.

If Canada produces computers at a lower relative cost than Germany, Canada is said to have a comparative disadvantage in computers.

According to Ricardo, a country will have a comparative advantage in the product in which its

Which of the following trade theories asserts that within the outer limits of the terms of trade, the actual terms of trade is determined by the relative strength of each country's demand for the other country's product?

Which is an efficiency gain provided by the Internet?

Discuss the pitfalls of outsourcing, especially as experienced by Boeing.

A country with high wages can export to a country with low wages, given sufficiently high labor productivity in the exporting country.

Analysts widely agree that Boeing's use of production outsourcing for its 787 has been highly successful in generating greater efficiencies in jetliner production.

If Hong Kong and Taiwan had identical labor costs but were subject to increasing costs of production,

When a nation is in autarky and maximizes its living standard, its consumption and production points are

Referring to the textbook's example of Babe Ruth, Ruth switched from being a pitcher to being an outfielder and batter because of the

Today, about ______ percent of a typical Ford vehicle comes from parts, components, and services purchased from external suppliers, many of which are outside of the United States.

Assume 1990 to be the base year.If by the end of 2004 a country's export price index rose from 100 to 130 while its import price index rose from 100 to 115, its terms of trade would equal 113.

The theory of reciprocal demand does NOT well apply when one country

When a worker quits from a steel company and joins an automobile firm, what factor of mobility does this come under?

The MacDougall study of comparative advantage hypothesized that in those industries in which U.S.labor productivity was relatively high, U.S.exports to the world should be lower than U.K.exports to the world, after adjusting for wage differentials.

Figure 2.2. Canadian Trade Possibilities -Referring to Figure 2.2, Canada has a comparative advantage in

The International Economy and Globalization

Sources of Comparative Advantage

Tariffs

Nontariff Trade Barriers

Trade Regulations and Industrial Policies

Trade Policies for the Developing Nations

Regional Trading Arrangements

International Factor Movements and Multinational Enterprises

The Balance of Payments

Foreign Exchange

Exchange Rate Determination

Mechanisms of International Adjustment

Exchange Rate Adjustments and the Balance of Payments

Exchange Rate Systems and Currency Crises

Filters

Exam 2: Foundations of Modern Trade Theory Comparative Advantage

All of the following may be exit barriers EXCEPT

Which is NOT a relatively mobile occupation, as these skills are rarely used in businesses?

Ricardo's theory of comparative advantage does NOT take into account demand conditions when determining relative commodity prices.

With constant opportunity costs, a nation will achieve the greatest possible gains from trade if it partially specializes in the production of the commodity of its comparative disadvantage.

If Canada produces computers at a lower relative cost than Germany, Canada is said to have a comparative disadvantage in computers.

According to Ricardo, a country will have a comparative advantage in the product in which its

Which of the following trade theories asserts that within the outer limits of the terms of trade, the actual terms of trade is determined by the relative strength of each country's demand for the other country's product?

Which is an efficiency gain provided by the Internet?

Discuss the pitfalls of outsourcing, especially as experienced by Boeing.

A country with high wages can export to a country with low wages, given sufficiently high labor productivity in the exporting country.

Analysts widely agree that Boeing's use of production outsourcing for its 787 has been highly successful in generating greater efficiencies in jetliner production.

If Hong Kong and Taiwan had identical labor costs but were subject to increasing costs of production,

When a nation is in autarky and maximizes its living standard, its consumption and production points are

Referring to the textbook's example of Babe Ruth, Ruth switched from being a pitcher to being an outfielder and batter because of the

Today, about ______ percent of a typical Ford vehicle comes from parts, components, and services purchased from external suppliers, many of which are outside of the United States.

Assume 1990 to be the base year.If by the end of 2004 a country's export price index rose from 100 to 130 while its import price index rose from 100 to 115, its terms of trade would equal 113.

The theory of reciprocal demand does NOT well apply when one country

When a worker quits from a steel company and joins an automobile firm, what factor of mobility does this come under?

The MacDougall study of comparative advantage hypothesized that in those industries in which U.S.labor productivity was relatively high, U.S.exports to the world should be lower than U.K.exports to the world, after adjusting for wage differentials.

Figure 2.2. Canadian Trade Possibilities ​ ​ -Referring to Figure 2.2, Canada has a comparative advantage in

The International Economy and Globalization

Sources of Comparative Advantage

Tariffs

Nontariff Trade Barriers

Trade Regulations and Industrial Policies

Trade Policies for the Developing Nations

Regional Trading Arrangements

International Factor Movements and Multinational Enterprises

The Balance of Payments

Foreign Exchange

Exchange Rate Determination

Mechanisms of International Adjustment

Exchange Rate Adjustments and the Balance of Payments

Exchange Rate Systems and Currency Crises

Filters

Figure 2.2. Canadian Trade Possibilities -Referring to Figure 2.2, Canada has a comparative advantage in