Question 1

Which of the following is TRUE according to the case study on U.S./ China trade presented in the chapter?

Accepted Answer

A) China has relative abundance in capital. 
B) China has relative abundance in skilled labor. 
C) The United States has relative scarcity in unskilled labor. 
D) The United States has relative scarcity in capital. 
A) China has relative abundance in capital. 
B) China has relative abundance in skilled labor. 
C) The United States has relative scarcity in unskilled labor. 
D) The United States has relative scarcity in capital. C

Question 2

Chinese exports of toys and footwear can be explained by factor endowments,while Chinese exports of telecommunications equipment and computers and accessories can be explained by product-cycle analysis.

Accepted Answer

A) True 
 B)False  True

Question 3

After trade opens,the short run impact on the income of the variable factor will be

Accepted Answer

A) a decrease. 
B) an increase. 
C) zero. 
D) indeterminate,depending on the consumption pattern of the owners of the variable factor. 
E) indeterminate,depending on the productivity of the variable factor. 
A) a decrease. 
B) an increase. 
C) zero. 
D) indeterminate,depending on the consumption pattern of the owners of the variable factor. 
E) indeterminate,depending on the productivity of the variable factor. D

Question 4

If General Motors imports parts from its plants in Canada and Mexico for finished trucks that it will sell across the NAFTA region,what type of trade does this represent?

Accepted Answer

The answer of If General Motors imports parts from its...

Question 5

Offshoring required which types of advances?

Accepted Answer

Advances in communications tec

Question 6

Which of the following is NOT a proposition of the Heckscher-Ohlin model?

Accepted Answer

A) A country has a comparative advantage in the production of that commodity which uses more intensively the country's more abundant resource. 
B) The effect of international trade is to tend to equalize factor prices between the trading nations. 
C) If Mexico is an unskilled labor abundant country,then Mexico has a comparative advantage in the production of goods that use unskilled labor more intensively. 
D) If the United States is a skilled labor abundant country,then the United States has a comparative advantage in the production of goods that use skilled labor more intensively. 
E) Countries will completely specialize in the product in which they have a comparative advantage if free trade is allowed to occur. 
A) A country has a comparative advantage in the production of that commodity which uses more intensively the country's more abundant resource. 
B) The effect of international trade is to tend to equalize factor prices between the trading nations. 
C) If Mexico is an unskilled labor abundant country,then Mexico has a comparative advantage in the production of goods that use unskilled labor more intensively. 
D) If the United States is a skilled labor abundant country,then the United States has a comparative advantage in the production of goods that use skilled labor more intensively. 
E) Countries will completely specialize in the product in which they have a comparative advantage if free trade is allowed to occur.

Question 7

Empirical tests of the theory of comparative advantage have provided

Accepted Answer

A) strong support for both the Ricardian and Heckscher-Ohlin models. 
B) mixed support for the Ricardian model and strong support for the Heckscher-Ohlin model. 
C) strong support for the Ricardian model and mixed support for the Heckscher-Ohlin model. 
D) mixed support for both Ricardian and Heckscher-Ohlin models. 
E) no support for either the Ricardian or the Heckscher-Ohlin models. 
A) strong support for both the Ricardian and Heckscher-Ohlin models. 
B) mixed support for the Ricardian model and strong support for the Heckscher-Ohlin model. 
C) strong support for the Ricardian model and mixed support for the Heckscher-Ohlin model. 
D) mixed support for both Ricardian and Heckscher-Ohlin models. 
E) no support for either the Ricardian or the Heckscher-Ohlin models.

Question 8

The O in OLI theory stands for ownership,and the asset owned can be tangible or intangible.

Accepted Answer

A) True 
 B)False

Question 9

The Heckscher-Ohlin Theorem predicts

Accepted Answer

A) who benefits and who loses from trade. 
B) which factors are abundant. 
C) the income distribution effects of trade. 
D) which goods will be exported. 
E) the importance of intraindustry trade. 
A) who benefits and who loses from trade. 
B) which factors are abundant. 
C) the income distribution effects of trade. 
D) which goods will be exported. 
E) the importance of intraindustry trade.

Question 10

If the case study on U.S./ China trade is correct in its analysis of factor abundance,

Accepted Answer

A) Chinese capital owners should see their income rise as trade increases. 
B) U)S.skilled labor inputs should see their incomes fall as trade increases. 
C) U)S.capital owners should see their income fall as trade increases. 
D) Chinese unskilled labor should see their income rise as trade increases. 
A) Chinese capital owners should see their income rise as trade increases. 
B) U)S.skilled labor inputs should see their incomes fall as trade increases. 
C) U)S.capital owners should see their income fall as trade increases. 
D) Chinese unskilled labor should see their income rise as trade increases.

Question 11

What does research thus far suggest about job loss and offshoring?

Accepted Answer

That outsourcing can

Question 12

The United States has the largest percentage of foreigners in its overall population of any nation.

Accepted Answer

A) True 
 B)False

Question 13

Suppose that Brazil is capital abundant and Chile is natural resource abundant.If timber is natural resource intensive and computers are capital intensive,then according to the Stolper-Samuelson Theorem,the incomes of the owners of ________ are likely to rise in Brazil after trade with Chile begins.

Accepted Answer

A) capital 
B) labor 
C) natural resources 
D) It is impossible to determine which will be favored. 
A) capital 
B) labor 
C) natural resources 
D) It is impossible to determine which will be favored.

Question 14

The L in OLI theory stands for loyalty,and this factor makes it more difficult for firms to substitute foreign operations for domestic as they fear a loss of sales due to negative publicity.

Accepted Answer

A) True 
 B)False

Question 15

Offshoring became a concern in the 1980s when modern communication and transport technology made it possible for firms to relocate production abroad.

Accepted Answer

A) True 
 B)False

Question 16

The bulk of offshoring is vertical,relating to producing a component piece in an overall supply chain production.

Accepted Answer

A) True 
 B)False

Question 17

Suppose that a country is producing on its PPC at a point to the left of the tangency between the trade line and the PPC.At the production point,

Accepted Answer

A) the opportunity cost in production of the good on the horizontal axis is less than its trade price. 
B) the opportunity cost in production of the good on the horizontal axis is more than its trade price. 
C) the opportunity cost in production of the good on the vertical axis is less than its trade price. 
D) the opportunity cost in production of the good on the horizontal axis may be either less than or more than its trade price. 
E) the opportunity cost in production of the good on the vertical axis equals its trade price. 
A) the opportunity cost in production of the good on the horizontal axis is less than its trade price. 
B) the opportunity cost in production of the good on the horizontal axis is more than its trade price. 
C) the opportunity cost in production of the good on the vertical axis is less than its trade price. 
D) the opportunity cost in production of the good on the horizontal axis may be either less than or more than its trade price. 
E) the opportunity cost in production of the good on the vertical axis equals its trade price.

Question 18

If the price of a good rises,then the effect on the income of the factors that are used intensively in its production will be

Accepted Answer

A) to raise income by an absolute amount that is less than the rise in prices. 
B) to raise income by an absolute amount that is more than the rise in prices. 
C) to raise income by a smaller percentage than the rise in prices. 
D) to raise income by a greater percentage than the rise in prices. 
E) to cause income to fall. 
A) to raise income by an absolute amount that is less than the rise in prices. 
B) to raise income by an absolute amount that is more than the rise in prices. 
C) to raise income by a smaller percentage than the rise in prices. 
D) to raise income by a greater percentage than the rise in prices. 
E) to cause income to fall.

Question 19

Suppose that Brazil is capital abundant and Chile is natural resource abundant.If timber is natural resource intensive and computers are capital intensive,then

Accepted Answer

A) Chile will produce more computers after trade begins with Brazil. 
B) Brazil will produce more timber after trade begins with Chile. 
C) Chile will produce more timber after trade begins with Brazil. 
D) Brazil will completely specialize in computers once trade begins with Chile. 
A) Chile will produce more computers after trade begins with Brazil. 
B) Brazil will produce more timber after trade begins with Chile. 
C) Chile will produce more timber after trade begins with Brazil. 
D) Brazil will completely specialize in computers once trade begins with Chile.

Question 20

Tijuana,Mexico is across the border from San Diego,California.It has become a world-leading producer and exporter of television sets and computer monitors,which it assembles in modern factories owned by multinational consumer electronics firms such as Sony.Initially,these electronics were produced in the industrialized countries of their parent companies,and after several years,the production moved to Tiajuana.This is an example of

Accepted Answer

A) the product cycle. 
B) intraindustry trade. 
C) the specific factors model. 
D) the magnification effect. 
E) None of the above. 
A) the product cycle. 
B) intraindustry trade. 
C) the specific factors model. 
D) the magnification effect. 
E) None of the above.

Which of the following is TRUE according to the case study on U.S./ China trade presented in the chapter?

Chinese exports of toys and footwear can be explained by factor endowments,while Chinese exports of telecommunications equipment and computers and accessories can be explained by product-cycle analysis.

After trade opens,the short run impact on the income of the variable factor will be

If General Motors imports parts from its plants in Canada and Mexico for finished trucks that it will sell across the NAFTA region,what type of trade does this represent?

Offshoring required which types of advances?

Which of the following is NOT a proposition of the Heckscher-Ohlin model?

Empirical tests of the theory of comparative advantage have provided

The O in OLI theory stands for ownership,and the asset owned can be tangible or intangible.

The Heckscher-Ohlin Theorem predicts

If the case study on U.S./ China trade is correct in its analysis of factor abundance,

What does research thus far suggest about job loss and offshoring?

The United States has the largest percentage of foreigners in its overall population of any nation.

Suppose that Brazil is capital abundant and Chile is natural resource abundant.If timber is natural resource intensive and computers are capital intensive,then according to the Stolper-Samuelson Theorem,the incomes of the owners of ________ are likely to rise in Brazil after trade with Chile begins.

The L in OLI theory stands for loyalty,and this factor makes it more difficult for firms to substitute foreign operations for domestic as they fear a loss of sales due to negative publicity.

Offshoring became a concern in the 1980s when modern communication and transport technology made it possible for firms to relocate production abroad.

The bulk of offshoring is vertical,relating to producing a component piece in an overall supply chain production.

Suppose that a country is producing on its PPC at a point to the left of the tangency between the trade line and the PPC.At the production point,

If the price of a good rises,then the effect on the income of the factors that are used intensively in its production will be

Suppose that Brazil is capital abundant and Chile is natural resource abundant.If timber is natural resource intensive and computers are capital intensive,then

The United States in a Global Economy

International Economic Institutions Since World War Ii

Comparative Advantage and the Gains From Trade

Beyond Comparative Advantage

The Theory of Tariffs and Quotas

Commercial Policy

International Trade and Labor and Environmental Standards

Trade and the Balance of Payments

Exchange Rates and Exchange Rate Systems

An Introduction to Open Economy Macroeconomics

International Financial Crises

The United States in the World Economy

The European Union: Many Markets Into One

Trade and Policy Reform in Latin America

Export-Oriented Growth in East Asia

The Bric Countries in the World Economy

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Exam 4: Comparative Advantage and Factor Endowments

Which of the following is TRUE according to the case study on U.S./ China trade presented in the chapter?

Chinese exports of toys and footwear can be explained by factor endowments,while Chinese exports of telecommunications equipment and computers and accessories can be explained by product-cycle analysis.

After trade opens,the short run impact on the income of the variable factor will be

If General Motors imports parts from its plants in Canada and Mexico for finished trucks that it will sell across the NAFTA region,what type of trade does this represent?

Offshoring required which types of advances?

Which of the following is NOT a proposition of the Heckscher-Ohlin model?

Empirical tests of the theory of comparative advantage have provided

The O in OLI theory stands for ownership,and the asset owned can be tangible or intangible.

The Heckscher-Ohlin Theorem predicts

If the case study on U.S./ China trade is correct in its analysis of factor abundance,

What does research thus far suggest about job loss and offshoring?

The United States has the largest percentage of foreigners in its overall population of any nation.

The L in OLI theory stands for loyalty,and this factor makes it more difficult for firms to substitute foreign operations for domestic as they fear a loss of sales due to negative publicity.

Offshoring became a concern in the 1980s when modern communication and transport technology made it possible for firms to relocate production abroad.

The bulk of offshoring is vertical,relating to producing a component piece in an overall supply chain production.

Suppose that a country is producing on its PPC at a point to the left of the tangency between the trade line and the PPC.At the production point,

If the price of a good rises,then the effect on the income of the factors that are used intensively in its production will be

Suppose that Brazil is capital abundant and Chile is natural resource abundant.If timber is natural resource intensive and computers are capital intensive,then

The United States in a Global Economy

International Economic Institutions Since World War Ii

Comparative Advantage and the Gains From Trade

Beyond Comparative Advantage

The Theory of Tariffs and Quotas

Commercial Policy

International Trade and Labor and Environmental Standards

Trade and the Balance of Payments

Exchange Rates and Exchange Rate Systems

An Introduction to Open Economy Macroeconomics

International Financial Crises

The United States in the World Economy

The European Union: Many Markets Into One

Trade and Policy Reform in Latin America

Export-Oriented Growth in East Asia

The Bric Countries in the World Economy

Filters