Exam 9: International Factor Movements and Multinational Enterprises

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.Policies that permit Honduran workers to freely migrate to Mexico would likely be resisted by:

In recent years,Apple Inc.has triggered controversy through its legal avoidance of U.S.income taxes.

Foreign direct investment would occur if Mobile Inc.of the United States acquired sufficient common stock in a foreign oil company to assume voting control.

If the size of the Canadian market is large enough to permit efficient production in Canada,a U.S.firm would profit by establishing a Canadian manufacturing subsidiary or licensing rights to a Canadian firm to manufacture and sell its product in Canada.

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 with supply S0,_____ workers are hired at a wage rate of $____ per hour,while total wages equal ____.

Which term best describes the Iran Oil Investment Co.?

Multinational enterprises face problems since they:

Figure 9.1 illustrates the market conditions facing Sony Company and American Company 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 Sony Company and American Company as competitors,Venture Company as a monopoly leads to a deadweight loss of consumer surplus of:

American labor unions have recently maintained that U.S.multinational enterprises have been:

International joint ventures can lead to welfare losses when the newly established firm:

Both economic theory and empirical studies support the notion that foreign direct investment is conducted in anticipation of future profits.

In recent years,the largest amount of U.S.direct investment abroad has occurred in:

What are the disadvantages of forming joint ventures?

Most U.S.direct investment abroad occurs in:

Figure 9.1 illustrates the market conditions facing Sony Company and American Company 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.Assume Venture Company's formation yields new cost reductions,indicated by MC1=AC1,which result from changes in work rules by Venture Company employees that led to higher worker productivity.The net effect of Venture Company's formation on the welfare of the domestic economy is:

In recent years,most foreign direct investment in the United States has come from:

The effect of workers migrating from low-wage Mexico to high-wage United States is to redistribute income from capital to labor in the United States and from labor to capital in Mexico.

Multinational corporations often locate manufacturing operations abroad in order to take advantage of foreign resource endowments or wage scales.

Immigration tends to reduce the incomes of all factors of production.

The smallest share of foreign direct investment in the U.S.has recently come from