Exam 10: Contemporary Global Economic Issues and Policies

The factor proportions theory predicts that when country A, which as a relative factor abundance of unskilled workers, begins to engage in international trade with country B, which as a relative factor abundance of skilled workers,

A firm-s "resourcing" decision involves choosing whether to assign productive tasks within the firm, outsource those tasks to other domestic firms, or outsource the tasks internationally to foreign firms.

Inter-industry trade involves trade among nations with firms producing very similar, highly substitutable items.

At a current wage rate less than the market equilibrium wage rate,

If firms in a domestic nation engage in international outsourcing from a foreign country, then in the short run one effect is:

At a given quantity of a product demanded, an increase in demand for the product results in a rise in marginal revenue and hence the marginal revenue product of labor and demand for labor.

A perfectly competitive firm always maintains a positive differential between the marginal revenue product of labor and the market wage rate.

Korean workers currently earn an hourly rate of wage compensation that is nearly double the compensation rate earned by workers in Canada.

Most evidence suggests that greater U.S. trade with other nations has benefited all U.S. workers, but has benefited skilled U.S. workers relatively more by boosting their wages to a larger extent than those of unskilled workers.

Which of the following results from an increase in exports from the domestic country?

The share of overall U.S. trade with developing nations has risen from just below 30 percent in 1960 to more than 50 percent today.

A profit-maximizing firm utilizes capital goods as inputs in production to the point at which the marginal revenue product of capital is always a constant amount above the price of the next UNIT of capital employed, thereby ensuring positive profits.

The basic factor-proportions theory indicates that nations gain by producing and exporting items in which they have a relative abundance of the factor of production required more intensively in production of those items.

If country X has a relative abundance of capital and country Y has a relative abundance of labor, then the factor proportions theory predicts that:

A rationale for foreign direct investment is that, in the face of trade barriers, firms located in a country with a relative abundance of capital can gain from exporting capital to nations with a relative abundance of labor.

International outsourcing refers to the employment of labor outside the countries in which companies are based.

The top two trading partners of the United States are China and Japan.

Which of the following is not a "resourcing" option for a domestic firm?

Which of the following can reduce the marginal revenue product of labor?

If the demand for a final product rises, then this results in: