Question 1

The Leontief paradox questioned the validity of the theory of:

Accepted Answer

A)  Comparative advantage 
B)  Factor endowments 
C)  Overlapping demands 
D)  Absolute advantage 
A)  Comparative advantage 
B)  Factor endowments 
C)  Overlapping demands 
D)  Absolute advantage B

Question 2

Which trade theory suggests that comparative advantage tends to shift from one nation to another as a product matures?

Accepted Answer

A)  Interindustry trade theory 
B)  Intraindustry trade theory 
C)  Product life cycle theory 
D)  Overlapping demand theory 
A)  Interindustry trade theory 
B)  Intraindustry trade theory 
C)  Product life cycle theory 
D)  Overlapping demand theory C

Question 3

How does Staffan Linder explain world trade patterns?

Accepted Answer

Linder offers two explanations of world trade patterns.Trade in primary products conforms well to the factor-endowment theory.However,trade in manufactured goods is best explained by overlapping demand structures among nations.For manufactured goods,the basis for trade is stronger when the structure of demand in two nations is more similar,due to similar per-capita incomes.

Question 4

The theory of overlapping demands predicts that trade in manufactured goods is unimportant for countries with very different:

Accepted Answer

A)  Tastes and preferences 
B)  Expectations of future interest rate levels 
C)  Per-capita income levels 
D)  Labor productivities 
A)  Tastes and preferences 
B)  Expectations of future interest rate levels 
C)  Per-capita income levels 
D)  Labor productivities

Question 5

Among the determinants underlying a country's international competitiveness in business services (e.g.,construction)are:

Accepted Answer

A)  The potential scale economies afforded by a market's size 
B)  Abundance of equipment including data processing facilities and computers 
C)  Skills and capabilities of employees and their wage rates 
D)  All of the above 
A)  The potential scale economies afforded by a market's size 
B)  Abundance of equipment including data processing facilities and computers 
C)  Skills and capabilities of employees and their wage rates 
D)  All of the above

Question 6

The product-life-cycle theory applies best to trade in primary products in the short run.

Accepted Answer

A) True 
 B)False

Question 7

According to the factor-endowment theory,a nation will import that good for which a large amount of the relatively abundant resource is used.

Accepted Answer

A) True 
 B)False

Question 8

For the United States,empirical studies indicate that over the past two decades the cost of international transportation relative to the value of U.S.imports has:

Accepted Answer

A)  Increased 
B)  Decreased 
C)  Not changed 
D)  None of the above 
A)  Increased 
B)  Decreased 
C)  Not changed 
D)  None of the above

Question 9

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?

Accepted Answer

A)  Autos 
B)  Steel 
C)  Soft drinks 
D)  Valuable electronics goods 
A)  Autos 
B)  Steel 
C)  Soft drinks 
D)  Valuable electronics goods

Question 10

Eli Heckscher and Bertil Ohlin are associated with the theory of comparative advantage that stresses differences in:

Accepted Answer

A)  Income levels among countries 
B)  Tastes and preferences among countries 
C)  Resource endowments among countries 
D)  Labor productivities among countries 
A)  Income levels among countries 
B)  Tastes and preferences among countries 
C)  Resource endowments among countries 
D)  Labor productivities among countries

Question 11

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

Accepted Answer

A)  Tastes and preferences 
B)  The role of technological innovation 
C)  Per-capita income levels of nations 
D)  Both b and c 
A)  Tastes and preferences 
B)  The role of technological innovation 
C)  Per-capita income levels of nations 
D)  Both b and c

Question 12

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:

Accepted Answer

A)  Impossible 
B)  Possible 
C)  Highly profitable 
D)  Moderately profitable 
A)  Impossible 
B)  Possible 
C)  Highly profitable 
D)  Moderately profitable

Question 13

When transportation costs are added to our trade model,the low-cost exporting country produces less,consumes more,and exports less than that which occurs in the absence of transportation costs.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

According to Ricardian theory,comparative advantage depends on relative differences in labor productivity.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A)  Absolute advantage determines the distribution of the gains from trade 
B)  Comparative advantage determines the distribution of the gains from trade 
C)  The division of labor is limited by the size of the world market 
D)  A country exports goods for which its resource endowments are most suited 
A)  Absolute advantage determines the distribution of the gains from trade 
B)  Comparative advantage determines the distribution of the gains from trade 
C)  The division of labor is limited by the size of the world market 
D)  A country exports goods for which its resource endowments are most suited

Question 17

By widening the size of the domestic market,international trade permits companies to take advantage of longer production runs and increasing efficiencies such as mass production.

Accepted Answer

A) True 
 B)False

Question 18

In the absence of transportation costs,free trade results in the equalization of the prices of traded goods,as well as resource prices,in the trading nations.

Accepted Answer

A) True 
 B)False

Question 19

Explain how immigration and trade may worsen wage inequality,and how college education may mitigate against that.

Accepted Answer

Trade tends to increase the demand for s

Question 20

The product-life-cycle model contends that when a new product is introduced to the home market,it generally requires low-skilled labor to produce it.

Accepted Answer

A) True 
 B)False

The Leontief paradox questioned the validity of the theory of:

Which trade theory suggests that comparative advantage tends to shift from one nation to another as a product matures?

How does Staffan Linder explain world trade patterns?

The theory of overlapping demands predicts that trade in manufactured goods is unimportant for countries with very different:

Among the determinants underlying a country's international competitiveness in business services (e.g.,construction)are:

The product-life-cycle theory applies best to trade in primary products in the short run.

According to the factor-endowment theory,a nation will import that good for which a large amount of the relatively abundant resource is used.

For the United States,empirical studies indicate that over the past two decades the cost of international transportation relative to the value of U.S.imports has:

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?

Eli Heckscher and Bertil Ohlin are associated with the theory of comparative advantage that stresses differences in:

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

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:

When transportation costs are added to our trade model,the low-cost exporting country produces less,consumes more,and exports less than that which occurs in the absence of transportation costs.

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

According to Ricardian theory,comparative advantage depends on relative differences in labor productivity.

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

By widening the size of the domestic market,international trade permits companies to take advantage of longer production runs and increasing efficiencies such as mass production.

In the absence of transportation costs,free trade results in the equalization of the prices of traded goods,as well as resource prices,in the trading nations.

Explain how immigration and trade may worsen wage inequality,and how college education may mitigate against that.

The product-life-cycle model contends that when a new product is introduced to the home market,it generally requires low-skilled labor to produce it.

the International Economy and Globalization

Foundations of Modern Trade Theory: Comparative Advantage

Tariffs

Nontariff Trade Barriers

Trade Regulations and Industrial Policies

Trade Policies for the Developing Nations

Regional Trading Arrangements

International Factor Movements and Multinational Enterprises

the Balance of Payments

Foreign Exchange

Exchange-rate Determination

Balance-of-payments Adjustments

Exchange-rate Adjustments and the Balance of Payments

Exchange-rate Systems and Currency Crises

Macroeconomic Policy in an Open Economy

International Banking: Reserves, debt, and Risk

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Exam 3: Sources of Comparative Advantage

The Leontief paradox questioned the validity of the theory of:

Which trade theory suggests that comparative advantage tends to shift from one nation to another as a product matures?

How does Staffan Linder explain world trade patterns?

The theory of overlapping demands predicts that trade in manufactured goods is unimportant for countries with very different:

Among the determinants underlying a country's international competitiveness in business services (e.g.,construction)are:

The product-life-cycle theory applies best to trade in primary products in the short run.

According to the factor-endowment theory,a nation will import that good for which a large amount of the relatively abundant resource is used.

For the United States,empirical studies indicate that over the past two decades the cost of international transportation relative to the value of U.S.imports has:

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?

Eli Heckscher and Bertil Ohlin are associated with the theory of comparative advantage that stresses differences in:

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

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:

When transportation costs are added to our trade model,the low-cost exporting country produces less,consumes more,and exports less than that which occurs in the absence of transportation costs.

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

According to Ricardian theory,comparative advantage depends on relative differences in labor productivity.

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

By widening the size of the domestic market,international trade permits companies to take advantage of longer production runs and increasing efficiencies such as mass production.

In the absence of transportation costs,free trade results in the equalization of the prices of traded goods,as well as resource prices,in the trading nations.

Explain how immigration and trade may worsen wage inequality,and how college education may mitigate against that.

The product-life-cycle model contends that when a new product is introduced to the home market,it generally requires low-skilled labor to produce it.

the International Economy and Globalization

Foundations of Modern Trade Theory: Comparative Advantage

Tariffs

Nontariff Trade Barriers

Trade Regulations and Industrial Policies

Trade Policies for the Developing Nations

Regional Trading Arrangements

International Factor Movements and Multinational Enterprises

the Balance of Payments

Foreign Exchange

Exchange-rate Determination

Balance-of-payments Adjustments

Exchange-rate Adjustments and the Balance of Payments

Exchange-rate Systems and Currency Crises

Macroeconomic Policy in an Open Economy

International Banking: Reserves, debt, and Risk

Filters