Question 1

If the United States and Canada trade hydro-powered electricity for Hollywood films,what type of trade does this represent?

Accepted Answer

The answer of If the United States and Canada trade...

Question 2

Describe how Mexico's manufacturing has changed location and type over time.

Accepted Answer

The answer of Describe how Mexico's manufacturing has changed location...

Question 3

Which industry was first covered by a free trade agreement between Canada and the United States?

Accepted Answer

The answer of Which industry was first covered by a...

Question 4

An internal economies of scale is defined as

Accepted Answer

A) an industry with costs that fall for all firms. 
B) a firm with falling costs over a specific level of output. 
C) a firm with falling costs over a relatively large range of output. 
D) a firm with falling costs over a relatively large range of output, but definite declining profits.

Question 5

WTO rules allow subsides

Accepted Answer

A) when there are external economies. 
B) of "precompetitive" activities such as research. 
C) when there are internal economies. 
D) when there are positive externalities in production.

Question 6

Free market economies underproduce goods with positive externalities because

Accepted Answer

A) there are no benefits to the production of these goods. 
B) the additional social benefits are not taken into account by the marketplace. 
C) the additional social benefits cannot be measured. 
D) the additional social benefits are too small to matter.

Question 7

Comparative advantage has mixed results when it comes to predicting a country's trade patterns.Which of the following is FALSE?

Accepted Answer

A) There are many potential products an economy might export that use the same comparative advantage. 
B) A large share of international trade is not based on comparative advantage. 
C) Comparative advantage has proven completely incapable of predicting trade. 
D) Comparative advantage is a dynamic concept, which means that the spread of technology, improvement in skills, and learning-by-doing may alter a country's comparative advantage over time.

Question 8

Intraindustry trade relies on

Accepted Answer

A) economies of scale. 
B) the product cycle. 
C) differences in factor endowments. 
D) monopoly pricing.

Question 9

One reason that a large share of the trade between high-income industrial economies is intraindustry trade is because

Accepted Answer

A) it is more advantageous than interindustry trade. 
B) high-income industrial economies produce in the first stage of the product cycle. 
C) high-income industrial economies have dissimilar resource endowments in absolute terms. 
D) it allows firms to take advantage of internal economies of scale.

Question 10

If social returns to the production of a good are greater than private returns,then we can conclude that relative to the social optimum,the good will be

Accepted Answer

A) overproduced and underpriced. 
B) underproduced and overpriced. 
C) overproduced and overpriced. 
D) underproduced and underpriced.

Question 11

Concentration of firms in a particular region is likely to attract skilled labor to that area.

Accepted Answer

A) True 
 B)False

Question 12

Trading French wine for California wine is an example of intraindustry trade.

Accepted Answer

A) True 
 B)False

Question 13

Intraindustry trade is characterized by what two features?

Accepted Answer

The answer of Intraindustry trade is characterized by what two...

Question 14

To minimize costs,firms should have plants close to every market.

Accepted Answer

A) True 
 B)False

Question 15

Japan and Korea use or have used many industrial policies,and they are both considered to be countries that have developed successfully.Does that mean that the industrial policies caused their successful development?

Accepted Answer

The answer of Japan and Korea use or have used...

Question 16

Under some circumstances,trade could stifle the development of new industries and reduce global efficiency.All of the following describe conditions that could lead to that situation except

Accepted Answer

A) an initial head start gives a scale advantage to already existing firms in one country. 
B) diseconomies of scale make it impossible for new firms to enter the market. 
C) a location has a better-developed linkage between suppliers and producers, giving it a cost advantage. 
D) a historical accident, such as the shifting of airplane production to the United States to avoid World War II bombings, causes firms in one location to have a competitive advantage.

Question 17

The United States does not use subsidies as part of its policies.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is NOT a situation providing a potential advantage for Mexico that makes it competitive compared to China in trade with the United States?

Accepted Answer

A) The product line requires quick turn-around time from or to delivery. 
B) The need to manage a just-in-time inventory system 
C) Wages are low and the production process is labor intensive. 
D) The product is heavy and bulky relative to its final value.

Question 19

Explain why industrial policies are controversial.

Accepted Answer

The answer of Explain why industrial policies are controversial....

Question 20

Industrial policies have not been effective in encouraging investment in clean energy.

Accepted Answer

A) True 
 B)False

Exam 5: Beyond Comparative Advantage

If the United States and Canada trade hydro-powered electricity for Hollywood films,what type of trade does this represent?

Describe how Mexico's manufacturing has changed location and type over time.

Which industry was first covered by a free trade agreement between Canada and the United States?

An internal economies of scale is defined as

WTO rules allow subsides

Free market economies underproduce goods with positive externalities because

Comparative advantage has mixed results when it comes to predicting a country's trade patterns.Which of the following is FALSE?

Intraindustry trade relies on

One reason that a large share of the trade between high-income industrial economies is intraindustry trade is because

If social returns to the production of a good are greater than private returns,then we can conclude that relative to the social optimum,the good will be

Concentration of firms in a particular region is likely to attract skilled labor to that area.

Trading French wine for California wine is an example of intraindustry trade.

Intraindustry trade is characterized by what two features?

To minimize costs,firms should have plants close to every market.

Japan and Korea use or have used many industrial policies,and they are both considered to be countries that have developed successfully.Does that mean that the industrial policies caused their successful development?

Under some circumstances,trade could stifle the development of new industries and reduce global efficiency.All of the following describe conditions that could lead to that situation except

The United States does not use subsidies as part of its policies.

Which of the following is NOT a situation providing a potential advantage for Mexico that makes it competitive compared to China in trade with the United States?

Explain why industrial policies are controversial.

Industrial policies have not been effective in encouraging investment in clean energy.