Exam 6: International Trade and Factor Mobility Theory

The free trade theories of specialization primarily assume that ________.

Country X brings in a large number of unskilled immigrants to meet its labor needs. Which of the following is the LEAST likely to occur in Country X as a result?

Which of the following is the LEAST likely result of outward migration?

The inability of a company to gain foreign production factors to use in its domestic operations most likely ________.

The foreign-born population as a percentage of total population is substantial for some countries and insignificant for others.

Countries with large land areas are generally less dependent on trade than countries with small land areas.

In this example,assume that both trade and production factors are internationally mobile. Using domestic labor,the labor cost per silicon chip is $.10 in Japan and $.20 in the United States. Using domestic capital,the capital cost per chip is $.10 in Japan and $.05 in the United States. Chip transportation in either direction is $.10. Japanese labor is willing to work in the United States for $.15 per chip including the workers' transport cost. U.S. capital will go to Japan at a cost of $.08 per chip including transaction costs. Which silicon chips will the United States buy?

Which of the following statements most likely undermines the arguments for a strategic trade policy?

The comparative advantage theory holds that a country will gain from trade even though it can produce all goods more efficiently than other countries.

The premise that there will be more finely tuned specialization of production among countries is most likely based on the idea that companies will ________.

According to the diamond of national advantage theory,the domestic existence of all four conditions best explains ________.

According to theories of specialization in international trade,gains occur because specialized workers move to countries that can use their skills more effectively.

Comparative advantage theory holds that gains from trade are the result of capital movements from countries with low interest rates to countries with higher interest rates.

In a short essay,discuss the theory of mercantilism,and discuss favorable and unfavorable balances of trade as they apply to international business.

The theory of absolute advantage holds that there are advantages to trade because different countries can produce different goods more efficiently than others.

The top 10 exporting countries are dominated by developing countries.

Most world trade takes place between raw material exporters and manufacturing exporters.

Research shows that urbanization leads to higher productivity. Which of the following is the LEAST likely reason for this?

Neomercantilism describes the approach of countries that try to run a favorable balance of trade to ________.

Nontradable goods are best defined as ________.