Exam 9: International Factor Movements and Multinational Enterprises

A joint venture leads to increases in national welfare if the cost-reduction effect is due to wage concessions and if it more than offsets the market-power effect.

Which of the following would best explain why foreign direct investment might be attracted to the United States?

Multinational enterprises may provide benefits to their source (home)countries because they may:

____ refers to highly educated and skilled people who migrate from poor developing countries to wealthy industrial countries.

"Risk spreading" is a motive most likely to be served when firms undergo:

Figure 9.1 illustrates the market conditions facing Sony Company and American Company initially operating as competitors in the domestic ball bearing market. Each firm realizes constant long-run costs, MC?=AC?. Figure 9.1. International Joint Venture -Consider Figure 9.1.Assume Venture Company's formation yields new cost reductions,indicated by MC?=AC?,which result from technological advances.Realizing that Venture Company results in a deadweight loss of consumer surplus,the net effect of Venture Company's formation on the welfare of the domestic economy is:

International trade in goods and services and flows of productive factors are substitutes for each other.

Figure 9.2 represents the U.S. labor market. Assume that labor and capital are the only factors of production. Also assume the initial supply schedule of labor is denoted by S? and consists entirely of native U.S. workers. The demand schedule of labor is denoted by D?. Figure 9.2. U.S. Labor Market -Consider Figure 9.2,at labor market equilibrium,workers are hired at a wage rate of $____ per hour,while total wages equal ____.

Trade analysis involving multinational enterprises differs from our conventional trade analysis in that multinational enterprise analysis emphasizes:

If a joint venture among competing firms is able to cut costs by extracting wage concessions from domestic workers,national welfare increases.

The market power effect of an international joint venture can lead to welfare losses for the domestic economy unless offset by cost reductions.Which type of cost reduction would not lead to offsetting welfare gains for the overall economy?

Opposition to Mexico's maquiladoras has come from U.S.labor unions which claim that maquiladoras have resulted in job losses for U.S.workers.

"Guest worker" programs generally result in temporary migration of workers from:

In recent years,most foreign direct investment in the United States has come from:

The source (home)location of most of the world's leading multinational enterprises is:

Which of the following is not a significant motive for the formation of multinational enterprises?

Multinational corporations often locate manufacturing operations abroad in order to take advantage of foreign resource endowments or wage scales.

American labor unions accuse U.S.multinational firms of all of the following except: that such firms

Joint ventures may lead to

Developing countries,such as Mexico and India,often close their borders to foreign companies unless they are willing to take on partner companies in developing countries.