Question 1

External economies refer to:

Accepted Answer

A)  cost advantages arising from locating a firm near important resources, such as skilled workers, capital resources, or required raw materials. 
B)  cost advantages arising from specializing in producing and trading items in which a nation has a comparative advantage. 
C)  cost advantages arising from specializing in producing and trading items in which a nation has an absolute advantage. 
D)  cost advantages arising from expanding production via trade to reach a firm-s minimum efficient scale. 
A)  cost advantages arising from locating a firm near important resources, such as skilled workers, capital resources, or required raw materials. 
B)  cost advantages arising from specializing in producing and trading items in which a nation has a comparative advantage. 
C)  cost advantages arising from specializing in producing and trading items in which a nation has an absolute advantage. 
D)  cost advantages arising from expanding production via trade to reach a firm-s minimum efficient scale.

Question 2

In principle, a tendency for firms to congregate in a single nation to reap trade-cost advantages related to key inputs located within that nation, thereby yielding a trade advantage for that nation, could result from:

Accepted Answer

A)  internal economies and attainment of minimum efficient scale. 
B)  external economies and agglomeration. 
C)  economies of scale and government-erected entry barriers. 
D)  diseconomies of scale and a first-mover advantage. 
A)  internal economies and attainment of minimum efficient scale. 
B)  external economies and agglomeration. 
C)  economies of scale and government-erected entry barriers. 
D)  diseconomies of scale and a first-mover advantage.

Question 3

The establishment of a foreign subsidiary of a multinational firm that produces a good or service that is similar to the one the firm produces in its home country is known as:

Accepted Answer

A)  vertical investment. 
B)  horizontal investment. 
C)  diagonal investment. 
D)  triangular investment. 
A)  vertical investment. 
B)  horizontal investment. 
C)  diagonal investment. 
D)  triangular investment.

Question 4

In a monopolistically competitive industry spanning more than one nation, intra-industry trade yields gains to firms in the form of a wider variety of products and lower product prices.

Accepted Answer

A) True 
 B)False

External economies refer to:

In principle, a tendency for firms to congregate in a single nation to reap trade-cost advantages related to key inputs located within that nation, thereby yielding a trade advantage for that nation, could result from:

The establishment of a foreign subsidiary of a multinational firm that produces a good or service that is similar to the one the firm produces in its home country is known as:

In a monopolistically competitive industry spanning more than one nation, intra-industry trade yields gains to firms in the form of a wider variety of products and lower product prices.

Understanding the Global Economy

Comparative Advantage: How Nations Can Gain From International Trade

Sources of Comparative Advantage

Regulating International Trade: Trade Policies and Their Effects

Regionalism and Multilateralism

Balance of Payments and Foreign Exchange Markets

Exchange Rate Systems: Past to Present

The Power of Arbitrage: Purchasing Power and Interest Rate Parities

Global Money and Banking: Where Central Banks Fit Into the World Economy

Contemporary Global Economic Issues and Policies

Economic Development

The Public Sector in the Global Economy

Dealing With Financial Crises: Does the World Need a New International Financial Architecture

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Exam 12: Industrial Structure and Trade in the Global Economy: Businesses Without Borders

External economies refer to:

In principle, a tendency for firms to congregate in a single nation to reap trade-cost advantages related to key inputs located within that nation, thereby yielding a trade advantage for that nation, could result from:

The establishment of a foreign subsidiary of a multinational firm that produces a good or service that is similar to the one the firm produces in its home country is known as:

In a monopolistically competitive industry spanning more than one nation, intra-industry trade yields gains to firms in the form of a wider variety of products and lower product prices.

Understanding the Global Economy

Comparative Advantage: How Nations Can Gain From International Trade

Sources of Comparative Advantage

Regulating International Trade: Trade Policies and Their Effects

Regionalism and Multilateralism

Balance of Payments and Foreign Exchange Markets

Exchange Rate Systems: Past to Present

The Power of Arbitrage: Purchasing Power and Interest Rate Parities

Global Money and Banking: Where Central Banks Fit Into the World Economy

Contemporary Global Economic Issues and Policies

Economic Development

The Public Sector in the Global Economy

Dealing With Financial Crises: Does the World Need a New International Financial Architecture

Filters