Exam 9: International Factor Movements and Multinational Enterprises

Canada views immigrants as:

Firms undertake multinational operations in order to:

Suppose that a steel manufacturer headquartered in Japan sets up a subsidiary in Canada to produce steel.This practice is referred to as:

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 schedule S1,the:

Since the 1980s,Japanese auto companies have invested billions of dollars in U.S.based assembly facilities,known as transplants.This investment is explained by all of the following except the desire to

The operations of an MNE have little effect on employment in either the host country or the home country.

Vertical integration occurs if a parent multinational corporation establishes foreign subsidiaries to produce intermediate goods or inputs that go into the production of a finished good.

The theory of multinational enterprise is totally inconsistent with the principle of comparative advantage.

Figure 9.2 represents the U.S.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 U.S.workers.The demand schedule of labor is denoted by D0. Figure 9.2.U.S.Labor Market -Consider Figure 9.2,at labor market equilibrium,_____ workers are hired at a wage rate of $____ per hour,while total wages equal ____.

As workers migrate from low-wage Mexico to high-wage United States,wages tend to rise in Mexico and fall in the United States.

What are the typical ways in which multinational enterprises have diversified their operations?

The decision to establish foreign manufacturing operations through direct investment or licensing depends on

Multinational enterprises may provide benefits to their source (home) countries because they may:

In natural-resource oriented industries,such as oil and copper,joint ventures have often been formed by several companies since the cost of resource-extraction may be prohibitively large for a particular company.

Concerning the hiring of foreign workers by U.S.multinational corporations,recent evidence suggests that multinationals

Most foreign-owned auto plants in the United States are located in

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.At labor market equilibrium,the payment to Mexican capital owners equals:

Recent evidence suggests that,wages paid by U.S.multinational enterprises to poor country workers are much lower than local manufacturing wages.

Multinational enterprises:

Foreign direct investment would occur if Microsoft Inc.of the United States purchased securities of the French government.