Question 1

Nations that have only a single abundant resource face significant risks,even when that resource is highly valued.

Accepted Answer

A) True 
 B)False  True

Question 2

What is the Heckscher-Ohlin theorem? Using the case studies in the chapter on U.S.trade with China describe the theory and the resulting trade patterns that would support it.

Accepted Answer

Students should address the following:
•A clear statement of the HO Theorem along the lines that nations differ in their endowments of factors of production,products differ in how intensively they use various factors of production,so a nation that has a relative abundance in a specific factor of production compared to its trading partner will have a comparative advantage in products that use that factor of production more intensively.
•The U.S.would have an abundance of capital and skilled labor and China unskilled labor.The text offers data that supports this.

Question 3

The graph above shows the PPC for a country that can produce oil or televisions.
The straight line is the trade line and CPC if production is at Point A.
Which of the following is a true statement?

Accepted Answer

A) This country should produce relatively more oil and relatively fewer televisions. 
B) This country should produce relatively more televisions and relatively less oil. 
C) This country should produce more of both goods. 
D) This country is producing the optimal mix of oil and televisions to maximize its income. 
A) This country should produce relatively more oil and relatively fewer televisions. 
B) This country should produce relatively more televisions and relatively less oil. 
C) This country should produce more of both goods. 
D) This country is producing the optimal mix of oil and televisions to maximize its income. A

Question 4

Offshoring by domestic firms causes job losses rather than job expansion in the home market.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Wage inequality has been on the rise in virtually all high-income industrial economies since the 1970s.The causes are probably numerous,but the leading explanation for the greatest share of the increase in inequality is

Accepted Answer

A) the growth of trade with developing countries. 
B) the growth of trade with other high income industrial countries. 
C) technological change which increased the relative demand for skilled workers. 
D) technological change which increased the relative demand for unskilled workers. 
A) the growth of trade with developing countries. 
B) the growth of trade with other high income industrial countries. 
C) technological change which increased the relative demand for skilled workers. 
D) technological change which increased the relative demand for unskilled workers.

Question 7

How is offshoring of services different from past trade patterns?

Accepted Answer

Services were consum

Question 8

The straight-line production possibilities curve

Accepted Answer

A) does not show increasing opportunity costs. 
B) fails to reflect tradeoffs. 
C) fails to benefit trading nations. 
D) refutes the principles of comparative advantage. 
A) does not show increasing opportunity costs. 
B) fails to reflect tradeoffs. 
C) fails to benefit trading nations. 
D) refutes the principles of comparative advantage.

Question 9

After trade opens,the short run impact on the income of the specific factor that is relatively scarce will be

Accepted Answer

A) a decrease in its income. 
B) an increase in its income. 
C) no change in its income. 
D) indeterminate, income effects are not possible to know. 
A) a decrease in its income. 
B) an increase in its income. 
C) no change in its income. 
D) indeterminate, income effects are not possible to know.

Question 10

A production possibilities curve that is a straight line represents the case of

Accepted Answer

A) constant costs. 
B) increasing costs. 
C) constant opportunity costs but increasing real costs. 
D) constant opportunity costs but decreasing real costs. 
A) constant costs. 
B) increasing costs. 
C) constant opportunity costs but increasing real costs. 
D) constant opportunity costs but decreasing real costs.

Question 11

Since empirical tests of the HO theory have given mixed results,the theory has little value.

Accepted Answer

A) True 
 B)False

Question 12

What are the factors that have been identified that affect a migration decision? Give examples of each.

Accepted Answer

Supply push factors are forces inside a

Question 13

Using the HO model,assume that the United States is capital abundant and Mexico is labor abundant.If soybeans are capital intensive and avocados are labor intensive,

Accepted Answer

A) Mexico will produce more soybeans once trade is introduced. 
B) the United States will produce more avocados once trade is introduced. 
C) avocado prices in the United States will fall once trade begins. 
D) soybean prices in Mexico will rise once trade begins. 
A) Mexico will produce more soybeans once trade is introduced. 
B) the United States will produce more avocados once trade is introduced. 
C) avocado prices in the United States will fall once trade begins. 
D) soybean prices in Mexico will rise once trade begins.

Question 14

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

Accepted Answer

That outsourcing can

Question 15

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 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

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. 
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.

Question 18

Using the HO model,assume that the United States is capital abundant and Mexico is labor abundant.If soybeans are capital intensive and avocados are labor intensive,it would be reasonable to expect the United States to

Accepted Answer

A) specialize completely in soybean production. 
B) specialize completely in avocado production. 
C) increase soybean production, but still produce some avocados. 
D) increase avocado production, but still produce some soybeans. 
A) specialize completely in soybean production. 
B) specialize completely in avocado production. 
C) increase soybean production, but still produce some avocados. 
D) increase avocado production, but still produce some soybeans.

Question 19

The relocation of service industry functions to another country is called what?

Accepted Answer

The answer of The relocation of service industry functions to...

Question 20

The graph above shows the PPC for a country that can produce oil or televisions.
The straight line is the trade line and CPC if production is at Point A.
Which of the following is a true statement?

Accepted Answer

A) This country should produce relatively more butter and relatively less coffee. 
B) This country should produce relatively less butter and relatively more coffee. 
C) This country should produce more of both goods. 
D) This country is producing the optimal mix of butter and coffee to maximize its income. 
A) This country should produce relatively more butter and relatively less coffee. 
B) This country should produce relatively less butter and relatively more coffee. 
C) This country should produce more of both goods. 
D) This country is producing the optimal mix of butter and coffee to maximize its income.

Nations that have only a single abundant resource face significant risks,even when that resource is highly valued.

What is the Heckscher-Ohlin theorem? Using the case studies in the chapter on U.S.trade with China describe the theory and the resulting trade patterns that would support it.

The graph above shows the PPC for a country that can produce oil or televisions. The straight line is the trade line and CPC if production is at Point A. Which of the following is a true statement?

Offshoring by domestic firms causes job losses rather than job expansion in the home market.

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

Wage inequality has been on the rise in virtually all high-income industrial economies since the 1970s.The causes are probably numerous,but the leading explanation for the greatest share of the increase in inequality is

How is offshoring of services different from past trade patterns?

The straight-line production possibilities curve

After trade opens,the short run impact on the income of the specific factor that is relatively scarce will be

A production possibilities curve that is a straight line represents the case of

Since empirical tests of the HO theory have given mixed results,the theory has little value.

What are the factors that have been identified that affect a migration decision? Give examples of each.

Using the HO model,assume that the United States is capital abundant and Mexico is labor abundant.If soybeans are capital intensive and avocados are labor intensive,

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

Empirical tests of the theory of comparative advantage have provided

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

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

Using the HO model,assume that the United States is capital abundant and Mexico is labor abundant.If soybeans are capital intensive and avocados are labor intensive,it would be reasonable to expect the United States to

The relocation of service industry functions to another country is called what?

The graph above shows the PPC for a country that can produce oil or televisions. The straight line is the trade line and CPC if production is at Point A. Which of the following is a true statement?

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

China and India in the World Economy

Filters

Exam 4: Comparative Advantage and Factor Endowments

Nations that have only a single abundant resource face significant risks,even when that resource is highly valued.

What is the Heckscher-Ohlin theorem? Using the case studies in the chapter on U.S.trade with China describe the theory and the resulting trade patterns that would support it.

The graph above shows the PPC for a country that can produce oil or televisions. The straight line is the trade line and CPC if production is at Point A. Which of the following is a true statement?

Offshoring by domestic firms causes job losses rather than job expansion in the home market.

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

Wage inequality has been on the rise in virtually all high-income industrial economies since the 1970s.The causes are probably numerous,but the leading explanation for the greatest share of the increase in inequality is

How is offshoring of services different from past trade patterns?

The straight-line production possibilities curve

After trade opens,the short run impact on the income of the specific factor that is relatively scarce will be

A production possibilities curve that is a straight line represents the case of

Since empirical tests of the HO theory have given mixed results,the theory has little value.

What are the factors that have been identified that affect a migration decision? Give examples of each.

Using the HO model,assume that the United States is capital abundant and Mexico is labor abundant.If soybeans are capital intensive and avocados are labor intensive,

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

Empirical tests of the theory of comparative advantage have provided

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

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

Using the HO model,assume that the United States is capital abundant and Mexico is labor abundant.If soybeans are capital intensive and avocados are labor intensive,it would be reasonable to expect the United States to

The relocation of service industry functions to another country is called what?

The graph above shows the PPC for a country that can produce oil or televisions. The straight line is the trade line and CPC if production is at Point A. Which of the following is a true statement?

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

China and India in the World Economy

Filters