Question 1

The Shipbreakers of Alang arouse the ire of Greenpeace because of

Accepted Answer

A) their competition with capital- intensive industries. 
B) the large amount of pollution associated with the operations at Alang. 
C) India's non- repentant nuclear stance. 
D) India's import- competing industrialization policies. 
E) the difficulty of avoiding ship accidents between Greenpeace's sailboat and the reconstructed container ships of Alang. 
A) their competition with capital- intensive industries. 
B) the large amount of pollution associated with the operations at Alang. 
C) India's non- repentant nuclear stance. 
D) India's import- competing industrialization policies. 
E) the difficulty of avoiding ship accidents between Greenpeace's sailboat and the reconstructed container ships of Alang. B

Question 2

The reason Airbus succeeded in the Brander Spencer example is that

Accepted Answer

A) Europeans tend to be better strategists than corn- fed Americans. 
B) U)S.laws actually prohibit U.S.exporters from bribing foreign officials. 
C) the subsidy removed the advantage that Boeing gained with their head start in production. 
D) Boeing made the first move in this strategic game. 
E) the Airbus actually was a better plane than the Boeing 747. 
A) Europeans tend to be better strategists than corn- fed Americans. 
B) U)S.laws actually prohibit U.S.exporters from bribing foreign officials. 
C) the subsidy removed the advantage that Boeing gained with their head start in production. 
D) Boeing made the first move in this strategic game. 
E) the Airbus actually was a better plane than the Boeing 747. C

Question 3

The Heckscher- Ohlin,factor- proportions model lends support to the argument that

Accepted Answer

A) trade tends to worsen the conditions of workers in poor countries. 
B) trade tends to worsen the conditions of workers in rich countries. 
C) trade tends to worsen the conditions of owners of capital in rich countries. 
D) trade tends to worsen the conditions of highly skilled workers in rich countries. 
E) trade tends to worsen the conditions of unskilled labor in rich countries. 
A) trade tends to worsen the conditions of workers in poor countries. 
B) trade tends to worsen the conditions of workers in rich countries. 
C) trade tends to worsen the conditions of owners of capital in rich countries. 
D) trade tends to worsen the conditions of highly skilled workers in rich countries. 
E) trade tends to worsen the conditions of unskilled labor in rich countries. E

Question 4

Spencer and Brander's model highlights the existence of

Accepted Answer

A) natural advantages in foreign technology firms. 
B) excess returns present in highly competitive markets. 
C) aircraft industries. 
D) the futility of government bureaucrats' attempts to build an airplane. 
E) excess returns,or rents,available in non- competitive markets. 
A) natural advantages in foreign technology firms. 
B) excess returns present in highly competitive markets. 
C) aircraft industries. 
D) the futility of government bureaucrats' attempts to build an airplane. 
E) excess returns,or rents,available in non- competitive markets.

Question 5

Criticisms of the Brander- Spencer model include all EXCEPT which of the following?

Accepted Answer

A) the problem of simultaneously causing harm to other industries 
B) the problem of insufficient information 
C) the problem of likely foreign retaliation 
D) the problem of harm to interests of consumers 
E) the problem of adverse effects of trade policy politics 
A) the problem of simultaneously causing harm to other industries 
B) the problem of insufficient information 
C) the problem of likely foreign retaliation 
D) the problem of harm to interests of consumers 
E) the problem of adverse effects of trade policy politics

Question 6

When one applies the Heckscher- Ohlin model of trade to the issue of trade- related income redistributions,one must conclude that North- South trade,such as U.S.- Mexico trade,

Accepted Answer

A) is likely to hurt low- skilled workers in Mexico. 
B) is likely to hurt high- skilled workers in the U.S. 
C) is likely to involve higher overall national economic gains that will be greater than any harm done to low- skilled workers in the U.S. 
D) gives no advantage to the workers in either country. 
E) must help low- skilled workers on both sides of the border. 
A) is likely to hurt low- skilled workers in Mexico. 
B) is likely to hurt high- skilled workers in the U.S. 
C) is likely to involve higher overall national economic gains that will be greater than any harm done to low- skilled workers in the U.S. 
D) gives no advantage to the workers in either country. 
E) must help low- skilled workers on both sides of the border.

Question 7

The proposal that trade agreements should include a system which monitors worker conditions and make the results available to consumers in the rich importing country

Accepted Answer

A) is consistent with the Ricardian theory of comparative advantage. 
B) is consistent with the scale economies approach to trade theory. 
C) is consistent with the Invisible Hand paradigm. 
D) is consistent with the principles laid out by the WTO. 
E) is consistent with the market failure approach. 
A) is consistent with the Ricardian theory of comparative advantage. 
B) is consistent with the scale economies approach to trade theory. 
C) is consistent with the Invisible Hand paradigm. 
D) is consistent with the principles laid out by the WTO. 
E) is consistent with the market failure approach.

Question 8

The reason Airbus succeeded in the Brander Spencer example is that

Accepted Answer

A) the European government made an explicit subsidy offer,but the U.S.government did not. 
B) Airbus' prices were better when adjusted for quality and warranty services. 
C) the Airbus plane benefited from more advanced technology. 
D) Boeing traditionally refused to undertake any exchange rate risk in its transactions. 
E) the U.S.acted in accordance with its ideological reliance on market solutions,whereas the Europeans ignored market and technological factors. 
A) the European government made an explicit subsidy offer,but the U.S.government did not. 
B) Airbus' prices were better when adjusted for quality and warranty services. 
C) the Airbus plane benefited from more advanced technology. 
D) Boeing traditionally refused to undertake any exchange rate risk in its transactions. 
E) the U.S.acted in accordance with its ideological reliance on market solutions,whereas the Europeans ignored market and technological factors.

Question 9

The invocation of beggar- thy- neighbor arguments with respect to industrial policies

Accepted Answer

A) applies only to rich countries most of whose trade partners are very poor countries. 
B) strengthens the argument for subsidies. 
C) does not apply to rich countries who can influence relative world prices. 
D) makes sense if the international Keynesian multipliers exceed unity. 
E) weakens the argument for subsidies. 
A) applies only to rich countries most of whose trade partners are very poor countries. 
B) strengthens the argument for subsidies. 
C) does not apply to rich countries who can influence relative world prices. 
D) makes sense if the international Keynesian multipliers exceed unity. 
E) weakens the argument for subsidies.

Question 10

The Ricardian model of comparative advantage lends support to the argument that

Accepted Answer

A) trade tends to worsen the conditions of unskilled labor in rich countries. 
B) trade is mutually beneficial to the countries that engage in it. 
C) trade tends to worsen the conditions of owners of capital in rich countries. 
D) trade tends to worsen the conditions of workers in poor countries. 
E) trade tends to worsen the conditions of workers in rich countries. 
A) trade tends to worsen the conditions of unskilled labor in rich countries. 
B) trade is mutually beneficial to the countries that engage in it. 
C) trade tends to worsen the conditions of owners of capital in rich countries. 
D) trade tends to worsen the conditions of workers in poor countries. 
E) trade tends to worsen the conditions of workers in rich countries.

Question 11

The Shipbreakers of Alang represent a perfect example of how a developing country can apply the principles of the Heckscher- Ohlin model,since

Accepted Answer

A) shipbreaking is a capital- intensive operation elsewhere in the world,and therefore represents a case of a factor intensity reversal. 
B) shipbreaking is generally considered to be a capital- intensive operation and India,being a large country has much capital. 
C) shipbreaking is a labor- intensive operation in India,and India's availability of capital per worker is less than that of its trade partners. 
D) India's climate lends itself to the work involved in shipbreaking. 
E) shipbreaking is a labor- intensive operation in India,and India has many workers since it is such a large country. 
A) shipbreaking is a capital- intensive operation elsewhere in the world,and therefore represents a case of a factor intensity reversal. 
B) shipbreaking is generally considered to be a capital- intensive operation and India,being a large country has much capital. 
C) shipbreaking is a labor- intensive operation in India,and India's availability of capital per worker is less than that of its trade partners. 
D) India's climate lends itself to the work involved in shipbreaking. 
E) shipbreaking is a labor- intensive operation in India,and India has many workers since it is such a large country.

Question 12

Most developing countries oppose including labor standards in trade agreements because

Accepted Answer

A) multinational corporations control them. 
B) they believe this would limit their ability to export to rich markets. 
C) they believe this would involve a loss of their national sovereignty. 
D) they do not want to improve wages for their workers. 
E) they believe this would create an uneven playing field. 
A) multinational corporations control them. 
B) they believe this would limit their ability to export to rich markets. 
C) they believe this would involve a loss of their national sovereignty. 
D) they do not want to improve wages for their workers. 
E) they believe this would create an uneven playing field.

Question 13

The Brander- Spencer model identified market failure in certain industries due to

Accepted Answer

A) lack of excess returns. 
B) unfair competition. 
C) wildcat destructive competition. 
D) limited competition. 
E) environmental negative externalities associated with pollution. 
A) lack of excess returns. 
B) unfair competition. 
C) wildcat destructive competition. 
D) limited competition. 
E) environmental negative externalities associated with pollution.

Question 14

Low wages and poor working conditions in many U.S.trade partners

Accepted Answer

A) prove that the gains- from- trade arguments of the Ricardian model are true. 
B) prove that the gains- from- trade arguments of the Ricardian model are false. 
C) are facts emphasized by U.S.labor in its contract negotiations. 
D) may be a fact of life,but economists don't care. 
E) prove that international trade is exploitative. 
A) prove that the gains- from- trade arguments of the Ricardian model are true. 
B) prove that the gains- from- trade arguments of the Ricardian model are false. 
C) are facts emphasized by U.S.labor in its contract negotiations. 
D) may be a fact of life,but economists don't care. 
E) prove that international trade is exploitative.

Question 15

Working conditions for clothing workers in Bangladesh are very poor.If countries refuse to buy clothing from Bangladesh in order to encourage change,the effect is likely to be that

Accepted Answer

A) firms will try to comply and workers will be worse off. 
B) firms will refuse to comply,but workers will be better off. 
C) firms will be forced to comply and workers will be better off. 
D) firms will try to comply and workers will be better off. 
E) regardless of how firms respond,workers will be better off. 
A) firms will try to comply and workers will be worse off. 
B) firms will refuse to comply,but workers will be better off. 
C) firms will be forced to comply and workers will be better off. 
D) firms will try to comply and workers will be better off. 
E) regardless of how firms respond,workers will be better off.

Question 16

Free trade and globalization is generally believed

Accepted Answer

A) to help each country safeguard the best of its own culture. 
B) to help spread the best of each country's culture,so as to uplift global cultural standards. 
C) to make no difference in the economic welfare of the world. 
D) to cause a degradation in the world's environment. 
E) to improve the environment by correcting for distortions caused by import competing policies. 
A) to help each country safeguard the best of its own culture. 
B) to help spread the best of each country's culture,so as to uplift global cultural standards. 
C) to make no difference in the economic welfare of the world. 
D) to cause a degradation in the world's environment. 
E) to improve the environment by correcting for distortions caused by import competing policies.

Question 17

Spencer and Brander's model highlights the conventional assumption that

Accepted Answer

A) government subsidies tend to waste taxpayer's money. 
B) government subsidies can produce profits that exceed the subsidy's value. 
C) government tends to distort when it displaces Adam Smith's Invisible Hand. 
D) government involvement in business or in the economy tends to fail. 
E) government subsidies cannot create a successfully competing export. 
A) government subsidies tend to waste taxpayer's money. 
B) government subsidies can produce profits that exceed the subsidy's value. 
C) government tends to distort when it displaces Adam Smith's Invisible Hand. 
D) government involvement in business or in the economy tends to fail. 
E) government subsidies cannot create a successfully competing export.

Question 18

When the WTO met in Seattle to initiate a further move towards free international trade,thousands of activists met

Accepted Answer

A) in order to support the WTO efforts of bringing about a universal shift of resources in poor countries to higher efficiency and productivity uses,which would raise the real incomes of everyone. 
B) in order to laud the WTO policy orientation which would bust local monopolies and therefore help ordinary relatively poor consumers everywhere. 
C) in order to laud the WTO policy of disallowing government sweetheart deals,which typically meant that corrupt governments subsidized their in- laws' conglomerates on the backs of poor taxpayers. 
D) in order to promote the WTO's goals of "Trade- not Aid." 
E) in order to protest WTO free trade policies that they believed hurt workers. 
A) in order to support the WTO efforts of bringing about a universal shift of resources in poor countries to higher efficiency and productivity uses,which would raise the real incomes of everyone. 
B) in order to laud the WTO policy orientation which would bust local monopolies and therefore help ordinary relatively poor consumers everywhere. 
C) in order to laud the WTO policy of disallowing government sweetheart deals,which typically meant that corrupt governments subsidized their in- laws' conglomerates on the backs of poor taxpayers. 
D) in order to promote the WTO's goals of "Trade- not Aid." 
E) in order to protest WTO free trade policies that they believed hurt workers.

Question 19

In the Brander- Spencer model the subsidy raises profits by more than the subsidy because of

Accepted Answer

A) the economies of scale once the company enters the market. 
B) the "multiplier" effect of government expenditures. 
C) the military- industrial complex. 
D) the forward and backward linkage effects of certain industries. 
E) the deterrent effect of the subsidy on foreign competition. 
A) the economies of scale once the company enters the market. 
B) the "multiplier" effect of government expenditures. 
C) the military- industrial complex. 
D) the forward and backward linkage effects of certain industries. 
E) the deterrent effect of the subsidy on foreign competition.

Question 20

The existence of positive externalities due to the impossibility of full appropriability

Accepted Answer

A) rejects the usefulness of government protectionism. 
B) supports arguments for free trade. 
C) provides support for government protectionism. 
D) supports the conclusions of the Heckscher- Ohlin model. 
E) supports the concept that the government should support only high- tech industries. 
A) rejects the usefulness of government protectionism. 
B) supports arguments for free trade. 
C) provides support for government protectionism. 
D) supports the conclusions of the Heckscher- Ohlin model. 
E) supports the concept that the government should support only high- tech industries.

The Shipbreakers of Alang arouse the ire of Greenpeace because of

The reason Airbus succeeded in the Brander Spencer example is that

The Heckscher- Ohlin,factor- proportions model lends support to the argument that

Spencer and Brander's model highlights the existence of

Criticisms of the Brander- Spencer model include all EXCEPT which of the following?

When one applies the Heckscher- Ohlin model of trade to the issue of trade- related income redistributions,one must conclude that North- South trade,such as U.S.- Mexico trade,

The proposal that trade agreements should include a system which monitors worker conditions and make the results available to consumers in the rich importing country

The reason Airbus succeeded in the Brander Spencer example is that

The invocation of beggar- thy- neighbor arguments with respect to industrial policies

The Ricardian model of comparative advantage lends support to the argument that

The Shipbreakers of Alang represent a perfect example of how a developing country can apply the principles of the Heckscher- Ohlin model,since

Most developing countries oppose including labor standards in trade agreements because

The Brander- Spencer model identified market failure in certain industries due to

Low wages and poor working conditions in many U.S.trade partners

Working conditions for clothing workers in Bangladesh are very poor.If countries refuse to buy clothing from Bangladesh in order to encourage change,the effect is likely to be that

Free trade and globalization is generally believed

Spencer and Brander's model highlights the conventional assumption that

When the WTO met in Seattle to initiate a further move towards free international trade,thousands of activists met

In the Brander- Spencer model the subsidy raises profits by more than the subsidy because of

The existence of positive externalities due to the impossibility of full appropriability

Introduction

World Trade: an Overview

Labor Productivity and Comparative Advantage: the Ricardian Model

Specific Factors and Income Distribution

Resources and Trade: the Heckscher-Ohlin Model

The Standard Trade Model

External Economies of Scale and the International Location of Production

Firms in the Global Economy: Export Decisions,outsourcing,and Multinational Enterprises

The Instruments of Trade Policy

The Political Economy of Trade Policy

Trade Policy in Developing Countries

Filters

Exam 12: Controversies in Trade Policy

The Shipbreakers of Alang arouse the ire of Greenpeace because of

The reason Airbus succeeded in the Brander Spencer example is that

The Heckscher- Ohlin,factor- proportions model lends support to the argument that

Spencer and Brander's model highlights the existence of

Criticisms of the Brander- Spencer model include all EXCEPT which of the following?

When one applies the Heckscher- Ohlin model of trade to the issue of trade- related income redistributions,one must conclude that North- South trade,such as U.S.- Mexico trade,

The proposal that trade agreements should include a system which monitors worker conditions and make the results available to consumers in the rich importing country

The reason Airbus succeeded in the Brander Spencer example is that

The invocation of beggar- thy- neighbor arguments with respect to industrial policies

The Ricardian model of comparative advantage lends support to the argument that

The Shipbreakers of Alang represent a perfect example of how a developing country can apply the principles of the Heckscher- Ohlin model,since

Most developing countries oppose including labor standards in trade agreements because

The Brander- Spencer model identified market failure in certain industries due to

Low wages and poor working conditions in many U.S.trade partners

Working conditions for clothing workers in Bangladesh are very poor.If countries refuse to buy clothing from Bangladesh in order to encourage change,the effect is likely to be that

Free trade and globalization is generally believed

Spencer and Brander's model highlights the conventional assumption that

When the WTO met in Seattle to initiate a further move towards free international trade,thousands of activists met

In the Brander- Spencer model the subsidy raises profits by more than the subsidy because of

The existence of positive externalities due to the impossibility of full appropriability

Introduction

World Trade: an Overview

Labor Productivity and Comparative Advantage: the Ricardian Model

Specific Factors and Income Distribution

Resources and Trade: the Heckscher-Ohlin Model

The Standard Trade Model

External Economies of Scale and the International Location of Production

Firms in the Global Economy: Export Decisions,outsourcing,and Multinational Enterprises

The Instruments of Trade Policy

The Political Economy of Trade Policy

Trade Policy in Developing Countries

Filters