Exam 3: Sources of Comparative Advantage

In explaining international trade,the product life cycle theory focuses on

Which of the following is a long-run theory,emphasizing changes in the trading position of a nation over a number of years?

Industrial policy seeks to direct resources to declining industries in which productivity is low,linkages to the rest of the economy are weak,and future competitiveness is remote.

If Japanese workers receive lower wages in the production of autos than do American workers:

The Heckscher-Ohlin theory emphasizes the role that demand plays in the creation of comparative advantage.

Economists agree that wages of unskilled workers are being held down by

The Heckscher-Ohlin theory suggests that land-abundant nations will export land-intensive goods while labor-abundant nations will export labor-intensive goods.

How does Staffan Linder explain world trade patterns?

The trade model of the Swedish economists Heckscher and Ohlin maintains that:

Assume the cost of transporting autos from Japan to Canada exceeds the pretrade price difference for autos between Japan and Canada.Trade in autos is:

Concerning the influence that transportation costs have on the location of industry,which of the following industries has generally attempted to locate production facilities close to resource supplies?

Linder's theory of overlapping demand provides an explanation of:

Which of the following best applies to the theory of overlapping demands?

Fears about the downward pressure that cheap foreign workers place on U.S.wages have led U.S.labor unions to lobby for import restrictions such as tariffs and quotas.

According to Staffan Linder,the factor endowment theory is useful in explaining trade patterns in manufactured goods,but not primary products.

The factor-endowment theory highlights the relative abundance of a nation's resources as the key factor underlying comparative advantage.

Which of the following would least likely apply to the product life cycle theory?

A product will be traded only if the cost of transporting it between nations is less than the pretrade difference between their relative product prices.

Empirical studies conclude that U.S.environmental policies are a more important determinant of trade performance than capital,raw materials,labor skills,and wages.

The factor-endowment theory asserts that with specialization and trade there tends to occur an equalization in the relative resource prices of trading partners.