Question 1

The factor-endowment theory highlights the relative abundance of a nation's resources as the key factor underlying comparative advantage.

Accepted Answer

A) True 
 B)False

Question 2

The simultaneous import and export of computers by Germany is an example of:

Accepted Answer

A)  Intra-industry trade 
B)  Inter-industry trade 
C)  Perfect competition 
D)  Imperfect competition 
A)  Intra-industry trade 
B)  Inter-industry trade 
C)  Perfect competition 
D)  Imperfect competition

Question 3

Ricardo's theory of comparative advantage is a static theory that does not consider changes in international competitiveness over the long run.

Accepted Answer

A) True 
 B)False

Question 4

Owners of resources specific to export industries tend to lose from international trade,while owners of factors specific to import-competing industries tend to gain.

Accepted Answer

A) True 
 B)False

Question 5

When industry output increases,a firm would realize an external economy of scale exists when

Accepted Answer

A)  its average total cost curve shifts downward 
B)  its average total cost curve shifts upward 
C)  it slides downward along its existing average total cost curve 
D)  it slides upward along its existing average total cost curve 
A)  its average total cost curve shifts downward 
B)  its average total cost curve shifts upward 
C)  it slides downward along its existing average total cost curve 
D)  it slides upward along its existing average total cost curve

Question 6

The simultaneous export and import of automobiles by Canada is an example of

Accepted Answer

A)  complete specialization 
B)  partial specialization 
C)  intrai-ndustry trade 
D)  interindustry trade 
A)  complete specialization 
B)  partial specialization 
C)  intrai-ndustry trade 
D)  interindustry trade

Question 7

When considering the effects of transportation costs,the conclusions of our trade model must be modified.This is because transportation costs result in:

Accepted Answer

A)  Lower trade volume,higher import prices,smaller gains from trade 
B)  Lower trade volume,lower import prices,smaller gains from trade 
C)  Higher trade volume,higher import prices,smaller gains from trade 
D)  Higher trade volume,lower import prices,greater gains from trade 
A)  Lower trade volume,higher import prices,smaller gains from trade 
B)  Lower trade volume,lower import prices,smaller gains from trade 
C)  Higher trade volume,higher import prices,smaller gains from trade 
D)  Higher trade volume,lower import prices,greater gains from trade

Question 8

Intra-industry trade can be explained in part by:

Accepted Answer

A)  Adam Smith's principle of absolute advantage 
B)  Perfect competition in product markets 
C)  Diseconomies of large scale production 
D)  Transportation costs between and within nations 
A)  Adam Smith's principle of absolute advantage 
B)  Perfect competition in product markets 
C)  Diseconomies of large scale production 
D)  Transportation costs between and within nations

Question 9

Industrial policy seeks to direct resources to declining industries in which productivity is low,linkages to the rest of the economy are weak,and future competitiveness is remote.

Accepted Answer

A) True 
 B)False

Question 10

How does Staffan Linder explain world trade patterns?

Accepted Answer

Linder offers two explanations of world

Question 11

Brazil is labor abundant relative to Germany if the ratio of labor to capital in Brazil is higher than that in Germany.

Accepted Answer

A) True 
 B)False

Question 12

Empirical testing by Wassily Leontief gave support to the Heckscher-Ohlin theory of trade.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following best applies to the theory of overlapping demands?

Accepted Answer

A)  Manufactured goods 
B)  Services 
C)  Primary products 
D)  None of the above 
A)  Manufactured goods 
B)  Services 
C)  Primary products 
D)  None of the above

Question 14

The Leontief Paradox was the first major challenge to the product-life-cycle theory of trade.

Accepted Answer

A) True 
 B)False

Question 15

If jetliners are a capital-intensive product for the United States,then in terms of the Heckscher-Ohlin theory the United States should be

Accepted Answer

A)  a labor abundant country 
B)  a land abundant country 
C)  a capital abundant country 
D)  an energy abundant country 
A)  a labor abundant country 
B)  a land abundant country 
C)  a capital abundant country 
D)  an energy abundant country

Question 16

The Leontief paradox:

Accepted Answer

A)  Was applied to the product life cycle theory 
B)  Suggested that the U.S.exports labor-intensive goods 
C)  Found that national income differences underlie world trade patterns 
D)  Implied that diseconomies of scale occur at low output levels 
A)  Was applied to the product life cycle theory 
B)  Suggested that the U.S.exports labor-intensive goods 
C)  Found that national income differences underlie world trade patterns 
D)  Implied that diseconomies of scale occur at low output levels

Question 17

Assume the cost of transporting autos from Japan to Canada exceeds the pretrade price difference for autos between Japan and Canada.Trade in autos is:

Accepted Answer

A)  Impossible 
B)  Possible 
C)  Highly profitable 
D)  Moderately profitable 
A)  Impossible 
B)  Possible 
C)  Highly profitable 
D)  Moderately profitable

Question 18

Legislation requiring domestic manufacturers to install pollution abatement equipment tends to promote:

Accepted Answer

A)  Higher production costs and an increase in output 
B)  Higher production costs and a decrease in output 
C)  Lower production costs and an increase in output 
D)  Lower production costs and a decrease in output 
A)  Higher production costs and an increase in output 
B)  Higher production costs and a decrease in output 
C)  Lower production costs and an increase in output 
D)  Lower production costs and a decrease in output

Question 19

The existence of transportation costs tends to result in increasing gains that a country receives from trade.

Accepted Answer

A) True 
 B)False

Question 20

Critics maintain that labor unions can stifle international competitiveness for a business firm when they

Accepted Answer

A)  set wages and benefits above those in a competitive market 
B)  impose restrictive work rules that reduce labor productivity and innovation 
C)  emphasize seniority over merit in promotion and pay 
D)  all of the above 
A)  set wages and benefits above those in a competitive market 
B)  impose restrictive work rules that reduce labor productivity and innovation 
C)  emphasize seniority over merit in promotion and pay 
D)  all of the above

The factor-endowment theory highlights the relative abundance of a nation's resources as the key factor underlying comparative advantage.

The simultaneous import and export of computers by Germany is an example of:

Ricardo's theory of comparative advantage is a static theory that does not consider changes in international competitiveness over the long run.

Owners of resources specific to export industries tend to lose from international trade,while owners of factors specific to import-competing industries tend to gain.

When industry output increases,a firm would realize an external economy of scale exists when

The simultaneous export and import of automobiles by Canada is an example of

When considering the effects of transportation costs,the conclusions of our trade model must be modified.This is because transportation costs result in:

Intra-industry trade can be explained in part by:

Industrial policy seeks to direct resources to declining industries in which productivity is low,linkages to the rest of the economy are weak,and future competitiveness is remote.

How does Staffan Linder explain world trade patterns?

Brazil is labor abundant relative to Germany if the ratio of labor to capital in Brazil is higher than that in Germany.

Empirical testing by Wassily Leontief gave support to the Heckscher-Ohlin theory of trade.

Which of the following best applies to the theory of overlapping demands?

The Leontief Paradox was the first major challenge to the product-life-cycle theory of trade.

If jetliners are a capital-intensive product for the United States,then in terms of the Heckscher-Ohlin theory the United States should be

The Leontief paradox:

Assume the cost of transporting autos from Japan to Canada exceeds the pretrade price difference for autos between Japan and Canada.Trade in autos is:

Legislation requiring domestic manufacturers to install pollution abatement equipment tends to promote:

The existence of transportation costs tends to result in increasing gains that a country receives from trade.

Critics maintain that labor unions can stifle international competitiveness for a business firm when they

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

The factor-endowment theory highlights the relative abundance of a nation's resources as the key factor underlying comparative advantage.

The simultaneous import and export of computers by Germany is an example of:

Ricardo's theory of comparative advantage is a static theory that does not consider changes in international competitiveness over the long run.

Owners of resources specific to export industries tend to lose from international trade,while owners of factors specific to import-competing industries tend to gain.

When industry output increases,a firm would realize an external economy of scale exists when

The simultaneous export and import of automobiles by Canada is an example of

When considering the effects of transportation costs,the conclusions of our trade model must be modified.This is because transportation costs result in:

Intra-industry trade can be explained in part by:

Industrial policy seeks to direct resources to declining industries in which productivity is low,linkages to the rest of the economy are weak,and future competitiveness is remote.

How does Staffan Linder explain world trade patterns?

Brazil is labor abundant relative to Germany if the ratio of labor to capital in Brazil is higher than that in Germany.

Empirical testing by Wassily Leontief gave support to the Heckscher-Ohlin theory of trade.

Which of the following best applies to the theory of overlapping demands?

The Leontief Paradox was the first major challenge to the product-life-cycle theory of trade.

If jetliners are a capital-intensive product for the United States,then in terms of the Heckscher-Ohlin theory the United States should be

The Leontief paradox:

Assume the cost of transporting autos from Japan to Canada exceeds the pretrade price difference for autos between Japan and Canada.Trade in autos is:

Legislation requiring domestic manufacturers to install pollution abatement equipment tends to promote:

The existence of transportation costs tends to result in increasing gains that a country receives from trade.

Critics maintain that labor unions can stifle international competitiveness for a business firm when they

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