Question 1

When transportation costs are included in a trade model

Accepted Answer

A)  a country's gains from trade decreases 
B)  a country's gains from trade increases 
C)  a country's volume of trade increases 
D)  a country's terms of trade improve 
A)  a country's gains from trade decreases 
B)  a country's gains from trade increases 
C)  a country's volume of trade increases 
D)  a country's terms of trade improve

Question 2

Intra-industry trade can be explained by product differentiation,economies of scale,seasons of the year,and transportation costs.

Accepted Answer

A) True 
 B)False

Question 3

According to the factor-endowment theory,a nation will export that good for which a large amount of the relatively scarce resource is used.

Accepted Answer

A) True 
 B)False

Question 4

A larger variety of products results from international trade especially if:

Accepted Answer

A)  International trade affords producers monopoly power 
B)  National governments levy import tariffs and quotas 
C)  Producing goods entails increasing costs 
D)  Economies of scale exist for producers 
A)  International trade affords producers monopoly power 
B)  National governments levy import tariffs and quotas 
C)  Producing goods entails increasing costs 
D)  Economies of scale exist for producers

Question 5

Because seasons in the Southern Hemisphere are opposite those in the Northern Hemisphere,one would expect intra-industry trade to occur in agricultural products.

Accepted Answer

A) True 
 B)False

Question 6

In his test of the Heckscher-Ohlin model,W.Leontief found that,although the United States was perceived as being capital abundant relative to the rest of the world,U.S.exports were less capital intensive than import-competing goods.

Accepted Answer

A) True 
 B)False

Question 7

Explain how immigration and trade may worsen wage inequality,and how college education may mitigate against that.

Accepted Answer

Trade tends to increase the demand for s

Question 8

Which of the following suggests that by widening the market's size,international trade can permit longer production runs for manufacturers,which leads to increasing efficiency?

Accepted Answer

A)  Economies of scale 
B)  Diseconomies of scale 
C)  Comparative cost theory 
D)  Absolute cost theory 
A)  Economies of scale 
B)  Diseconomies of scale 
C)  Comparative cost theory 
D)  Absolute cost theory

Question 9

Chinese manufacturers face rising wages because of:

Accepted Answer

A)  China's one-child policy 
B)  land policies 
C)  bureaucratic delay in being declared an urban dweller 
D)  all of these 
A)  China's one-child policy 
B)  land policies 
C)  bureaucratic delay in being declared an urban dweller 
D)  all of these

Question 10

According to the factor-endowment theory,international specialization and trade cause a nation's cheap resource to become cheaper and a nation's expensive resource to become more expensive.

Accepted Answer

A) True 
 B)False

Question 11

The Heckscher-Ohlin theory asserts that relative differences in labor productivity underlie comparative advantage.

Accepted Answer

A) True 
 B)False

Question 12

A firm is said to enjoy economies of scale over the range of output for which the long-run average cost is:

Accepted Answer

A)  Increasing 
B)  Constant 
C)  Decreasing 
D)  None of the above 
A)  Increasing 
B)  Constant 
C)  Decreasing 
D)  None of the above

Question 13

A product will be internationally traded as long as the pretrade price differential between the trading partners is:

Accepted Answer

A)  Greater than the cost of transporting it between them 
B)  Equal to the cost of transporting it between them 
C)  Less than the cost of transporting it between them 
D)  None of the above 
A)  Greater than the cost of transporting it between them 
B)  Equal to the cost of transporting it between them 
C)  Less than the cost of transporting it between them 
D)  None of the above

Question 14

Classical trade theory emphasized which of the following as an underlying explanation of the basis for trade?

Accepted Answer

A)  Productivities of labor inputs 
B)  Tastes and preferences among nations 
C)  Changes in technologies over time 
D)  Quantities of economic resources 
A)  Productivities of labor inputs 
B)  Tastes and preferences among nations 
C)  Changes in technologies over time 
D)  Quantities of economic resources

Question 15

The Heckscher-Ohlin theory emphasizes the role that demand plays in the creation of comparative advantage.

Accepted Answer

A) True 
 B)False

Question 16

In the factor-endowment model,the production possibility curve is assumed to be bowed outward.This is the result of

Accepted Answer

A)  economies of large-scale production 
B)  constant opportunity cost 
C)  all factors of production are perfectly substitutable for each other 
D)  different factor endowments and different factor intensities in the production of the two products 
A)  economies of large-scale production 
B)  constant opportunity cost 
C)  all factors of production are perfectly substitutable for each other 
D)  different factor endowments and different factor intensities in the production of the two products

Question 17

Should international transportation costs decrease,the effect on international trade would include:

Accepted Answer

A)  An increase in the volume of trade 
B)  A smaller gain from trade 
C)  A decline in the income of home producers 
D)  A decrease in the level of specialization in production. 
A)  An increase in the volume of trade 
B)  A smaller gain from trade 
C)  A decline in the income of home producers 
D)  A decrease in the level of specialization in production.

Question 18

By widening the size of the domestic market,international trade permits companies to take advantage of longer production runs and increasing efficiencies such as mass production.

Accepted Answer

A) True 
 B)False

Question 19

The factor endowment theory assumes

Accepted Answer

A)  Same tastes and preferences 
B)  Factor inputs of uniform quality 
C)  Same technology 
D)  All of the above 
A)  Same tastes and preferences 
B)  Factor inputs of uniform quality 
C)  Same technology 
D)  All of the above

Question 20

According to the product life cycle theory,comparative advantage

Accepted Answer

A)  always remains in the country where the product is first introduced to the market 
B)  increases as government tariffs and quotas are imposed on imports 
C)  may shift from the home country to a foreign country as the product matures 
D)  is the result of lower wages in the home country than in other countries 
A)  always remains in the country where the product is first introduced to the market 
B)  increases as government tariffs and quotas are imposed on imports 
C)  may shift from the home country to a foreign country as the product matures 
D)  is the result of lower wages in the home country than in other countries

When transportation costs are included in a trade model

Intra-industry trade can be explained by product differentiation,economies of scale,seasons of the year,and transportation costs.

According to the factor-endowment theory,a nation will export that good for which a large amount of the relatively scarce resource is used.

A larger variety of products results from international trade especially if:

Because seasons in the Southern Hemisphere are opposite those in the Northern Hemisphere,one would expect intra-industry trade to occur in agricultural products.

In his test of the Heckscher-Ohlin model,W.Leontief found that,although the United States was perceived as being capital abundant relative to the rest of the world,U.S.exports were less capital intensive than import-competing goods.

Explain how immigration and trade may worsen wage inequality,and how college education may mitigate against that.

Which of the following suggests that by widening the market's size,international trade can permit longer production runs for manufacturers,which leads to increasing efficiency?

Chinese manufacturers face rising wages because of:

According to the factor-endowment theory,international specialization and trade cause a nation's cheap resource to become cheaper and a nation's expensive resource to become more expensive.

The Heckscher-Ohlin theory asserts that relative differences in labor productivity underlie comparative advantage.

A firm is said to enjoy economies of scale over the range of output for which the long-run average cost is:

A product will be internationally traded as long as the pretrade price differential between the trading partners is:

Classical trade theory emphasized which of the following as an underlying explanation of the basis for trade?

The Heckscher-Ohlin theory emphasizes the role that demand plays in the creation of comparative advantage.

In the factor-endowment model,the production possibility curve is assumed to be bowed outward.This is the result of

Should international transportation costs decrease,the effect on international trade would include:

By widening the size of the domestic market,international trade permits companies to take advantage of longer production runs and increasing efficiencies such as mass production.

The factor endowment theory assumes

According to the product life cycle theory,comparative advantage

The International Economy and Globalization

Foundations of Modern Trade Theory: 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

Macroeconomic Policy in an Open-economy

International Banking: Reserves, Debt, and Risk

Filters

Exam 3: Sources of Comparative Advantage

When transportation costs are included in a trade model

Intra-industry trade can be explained by product differentiation,economies of scale,seasons of the year,and transportation costs.

According to the factor-endowment theory,a nation will export that good for which a large amount of the relatively scarce resource is used.

A larger variety of products results from international trade especially if:

Because seasons in the Southern Hemisphere are opposite those in the Northern Hemisphere,one would expect intra-industry trade to occur in agricultural products.

In his test of the Heckscher-Ohlin model,W.Leontief found that,although the United States was perceived as being capital abundant relative to the rest of the world,U.S.exports were less capital intensive than import-competing goods.

Explain how immigration and trade may worsen wage inequality,and how college education may mitigate against that.

Which of the following suggests that by widening the market's size,international trade can permit longer production runs for manufacturers,which leads to increasing efficiency?

Chinese manufacturers face rising wages because of:

According to the factor-endowment theory,international specialization and trade cause a nation's cheap resource to become cheaper and a nation's expensive resource to become more expensive.

The Heckscher-Ohlin theory asserts that relative differences in labor productivity underlie comparative advantage.

A firm is said to enjoy economies of scale over the range of output for which the long-run average cost is:

A product will be internationally traded as long as the pretrade price differential between the trading partners is:

Classical trade theory emphasized which of the following as an underlying explanation of the basis for trade?

The Heckscher-Ohlin theory emphasizes the role that demand plays in the creation of comparative advantage.

In the factor-endowment model,the production possibility curve is assumed to be bowed outward.This is the result of

Should international transportation costs decrease,the effect on international trade would include:

By widening the size of the domestic market,international trade permits companies to take advantage of longer production runs and increasing efficiencies such as mass production.

The factor endowment theory assumes

According to the product life cycle theory,comparative advantage

The International Economy and Globalization

Foundations of Modern Trade Theory: 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

Macroeconomic Policy in an Open-economy

International Banking: Reserves, Debt, and Risk

Filters