Exam 9: International Factor Movements and Multinational Enterprises

During the 1970s, American oil companies acquired nonenergy companies (e.g., copper, auto components) in response to anticipated decreases in investment opportunities in oil. This type of diversification is referred to as:

The market power effect of an international joint venture can lead to welfare losses for the domestic economy unless offset by cost reductions. Which type of cost reduction would $\underline { \text { not } }$ lead to offsetting welfare gains for the overall economy?

The United States has discouraged the "brain drain" problem by permitting the immigration of unskilled workers while restricting the immigration of skilled persons.

Exxon Oil Co. would undertake forward vertical integration if its retailing division acquired oil wells in the Middle East.

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

$\underline { \text { most } }$ foreign direct investment in the United States occurs in:

Critics of U.S. trade and immigration policy maintain that

Which of the following $\underline { \text { best } }$ refers to the outright construction or purchase abroad of productive facilities, such as manufacturing plants, by domestic residents?

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 9.1 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 $\underline { \text { changes in work rules } }$ 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:

What are the disadvantages of forming joint ventures?

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 $\underline { \text { wage concessions } }$ accepted by Venture Company employees. The net effect of Venture Company's formation on the welfare of the domestic economy is:

"Guest worker" programs generally result in temporary migration of workers from:

In recent years, $\underline { \text { most } }$ foreign direct investment in the United States has come from:

Opposition to Mexico's maquiladoras has come from U.S. labor unions which claim that maquiladoras have resulted in job losses for U.S. workers.

The source (home) location of most of the world's leading multinational enterprises is: