Question 1

Labor and capital mobility are intertwined because ________.

Accepted Answer

A)  illegal workers sometimes pay large sums to people who smuggle them into another country 
B)  people cannot emigrate to another country unless they bring capital with them 
C)  companies receive tax benefits for hiring immigrants 
D)  immigrants bring an investment in human capital with them 
A)  illegal workers sometimes pay large sums to people who smuggle them into another country 
B)  people cannot emigrate to another country unless they bring capital with them 
C)  companies receive tax benefits for hiring immigrants 
D)  immigrants bring an investment in human capital with them D

Question 2

The free trade theories of specialization assume that countries will be better off even though some people are unemployed.

Accepted Answer

A) True 
 B)False  False

Question 3

Under mercantilism,colonial powers sought to run trade surpluses with their colonies by preventing the colonies from manufacturing.

Accepted Answer

A) True 
 B)False  True

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

The factor proportions theory holds that countries should concentrate production on those products that use their most abundant production factors.

Accepted Answer

A) True 
 B)False

Question 6

Factor mobility refers to the movement of which of the following combinations?

Accepted Answer

A)  capital, technology and people 
B)  currency, profits and raw materials 
C)  labor, capital and management 
D)  trade, profits and materials 
A)  capital, technology and people 
B)  currency, profits and raw materials 
C)  labor, capital and management 
D)  trade, profits and materials

Question 7

All of the following are types of products that are usually exceptions to what is predicted by the product life cycle theory EXCEPT ________.

Accepted Answer

A)  trendy clothing 
B)  luxury items 
C)  differentiated products 
D)  consumer durables 
A)  trendy clothing 
B)  luxury items 
C)  differentiated products 
D)  consumer durables

Question 8

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

Accepted Answer

A)  Emigrants remit capital used to start businesses in their home countries. 
B)  Nations receive more foreign aid. 
C)  Nations lose highly educated and productive workers. 
D)  Countries receive remittances from emigrants. 
A)  Emigrants remit capital used to start businesses in their home countries. 
B)  Nations receive more foreign aid. 
C)  Nations lose highly educated and productive workers. 
D)  Countries receive remittances from emigrants.

Question 9

According to the PLC theory,what is the most likely reason that companies manufacture products in locations with high labor rates during the introductory stage of a product's life cycle?

Accepted Answer

A)  Doing so allows use of long production runs using capital-intensive methods. 
B)  Many consumers are willing to pay high costs for the newest products. 
C)  Transportation costs are reduced by focusing on markets in developed countries. 
D)  Import restrictions prevent production in countries other than the ones making product innovations. 
A)  Doing so allows use of long production runs using capital-intensive methods. 
B)  Many consumers are willing to pay high costs for the newest products. 
C)  Transportation costs are reduced by focusing on markets in developed countries. 
D)  Import restrictions prevent production in countries other than the ones making product innovations.

Question 10

What assumptions underlie the theories of specialization in international trade? What are the limitations of these assumptions?

Accepted Answer

The assumptions that underlie the theori

Question 11

The trade theory that says countries should concentrate production on those products using their most abundant production factors is the ________.

Accepted Answer

A)  factor proportions theory 
B)  theory of comparative advantage 
C)  theory of absolute advantage 
D)  theory of nontradable goods 
A)  factor proportions theory 
B)  theory of comparative advantage 
C)  theory of absolute advantage 
D)  theory of nontradable goods

Question 12

Costa Rica's recent economic transformation to depend more on high-tech manufacturing is largely due to its adoption of ________ trade policy.

Accepted Answer

A)  an import substitution 
B)  a comparative advantage 
C)  a factor proportions 
D)  a strategic 
A)  an import substitution 
B)  a comparative advantage 
C)  a factor proportions 
D)  a strategic

Question 13

In a short essay,discuss the theory of absolute advantage and the reasons a country's efficiency improves based on this theory.

Accepted Answer

The theory of absolute advantage holds t

Question 14

Which of the following is most likely a basis for a Jamaican natural advantage in international trade?

Accepted Answer

A)  product technology developed by a Jamaican company 
B)  high literacy rates among Jamaican citizens 
C)  the use of English as the primary language 
D)  beautiful beaches and climate 
A)  product technology developed by a Jamaican company 
B)  high literacy rates among Jamaican citizens 
C)  the use of English as the primary language 
D)  beautiful beaches and climate

Question 15

Brain drain is a term that describes ________.

Accepted Answer

A)  a country's loss of educated, productive people 
B)  a nation's shift from an emerging market to a developed economy 
C)  the exportation of high-technology products in exchange for low-technology products 
D)  the unauthorized use of patents, copyrights, and technology by the counterfeiting industry 
A)  a country's loss of educated, productive people 
B)  a nation's shift from an emerging market to a developed economy 
C)  the exportation of high-technology products in exchange for low-technology products 
D)  the unauthorized use of patents, copyrights, and technology by the counterfeiting industry

Question 16

Countries with varied climates and varied natural resources generally ________ than countries with less varied climates and natural resources.

Accepted Answer

A)  have lower per capita incomes 
B)  depend less heavily on trade 
C)  have more ethnic subgroups 
D)  have higher endowments of capital relative to labor 
A)  have lower per capita incomes 
B)  depend less heavily on trade 
C)  have more ethnic subgroups 
D)  have higher endowments of capital relative to labor

Question 17

The comparative advantage theory holds that a country will gain from trade ________.

Accepted Answer

A)  when it exports products for which it has an acquired advantage and imports products for which another country has a natural advantage 
B)  if it exports goods it can produce more efficiently than other countries and imports goods other countries can produce more efficiently than it can 
C)  even though it can produce all goods more efficiently than other countries 
D)  if it exports products using its abundant production factors in exchange for products for which it has scarce production factors 
A)  when it exports products for which it has an acquired advantage and imports products for which another country has a natural advantage 
B)  if it exports goods it can produce more efficiently than other countries and imports goods other countries can produce more efficiently than it can 
C)  even though it can produce all goods more efficiently than other countries 
D)  if it exports products using its abundant production factors in exchange for products for which it has scarce production factors

Question 18

From an economic standpoint,why do production factors move from one country to another? How does factor movement affect international trade?

Accepted Answer

Capital,especially short-term capital,is

Question 19

The free trade theories of specialization primarily assume that ________.

Accepted Answer

A)  domestic resources are unable to move from the production of one good to another 
B)  countries have objectives other than economic efficiency 
C)  specialization triggers unemployment 
D)  resources are immobile internationally 
A)  domestic resources are unable to move from the production of one good to another 
B)  countries have objectives other than economic efficiency 
C)  specialization triggers unemployment 
D)  resources are immobile internationally

Question 20

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.

Accepted Answer

A) True 
 B)False

Labor and capital mobility are intertwined because ________.

The free trade theories of specialization assume that countries will be better off even though some people are unemployed.

Under mercantilism,colonial powers sought to run trade surpluses with their colonies by preventing the colonies from manufacturing.

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

The factor proportions theory holds that countries should concentrate production on those products that use their most abundant production factors.

Factor mobility refers to the movement of which of the following combinations?

All of the following are types of products that are usually exceptions to what is predicted by the product life cycle theory EXCEPT ________.

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

According to the PLC theory,what is the most likely reason that companies manufacture products in locations with high labor rates during the introductory stage of a product's life cycle?

What assumptions underlie the theories of specialization in international trade? What are the limitations of these assumptions?

The trade theory that says countries should concentrate production on those products using their most abundant production factors is the ________.

Costa Rica's recent economic transformation to depend more on high-tech manufacturing is largely due to its adoption of ________ trade policy.

In a short essay,discuss the theory of absolute advantage and the reasons a country's efficiency improves based on this theory.

Which of the following is most likely a basis for a Jamaican natural advantage in international trade?

Brain drain is a term that describes ________.

Countries with varied climates and varied natural resources generally ________ than countries with less varied climates and natural resources.

The comparative advantage theory holds that a country will gain from trade ________.

From an economic standpoint,why do production factors move from one country to another? How does factor movement affect international trade?

The free trade theories of specialization primarily assume that ________.

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.

Globalization and International Business

The Cultural Environments Facing Business

The Political and Legal Environments Facing Business

The Economic Environments Facing Businesses

Governmental Influence on Trade

Cross-National Cooperation and Agreements

Global Foreign-Exchange Markets

The Determination of Exchange Rates

Global Capital Markets

Globalization and Society

The Strategy of International Business

Country Evaluation and Selection

Export and Import

Direct Investment and Collaborative Strategies

The Organization of International Business

Marketing Globally

Global Manufacturing and Supply-Chain Management

International Accounting and Finance Issues

International Human Resource Management

Filters

Exam 5: International Trade and Factor-Mobility Theory

Labor and capital mobility are intertwined because ________.

The free trade theories of specialization assume that countries will be better off even though some people are unemployed.

Under mercantilism,colonial powers sought to run trade surpluses with their colonies by preventing the colonies from manufacturing.

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

The factor proportions theory holds that countries should concentrate production on those products that use their most abundant production factors.

Factor mobility refers to the movement of which of the following combinations?

All of the following are types of products that are usually exceptions to what is predicted by the product life cycle theory EXCEPT ________.

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

According to the PLC theory,what is the most likely reason that companies manufacture products in locations with high labor rates during the introductory stage of a product's life cycle?

What assumptions underlie the theories of specialization in international trade? What are the limitations of these assumptions?

The trade theory that says countries should concentrate production on those products using their most abundant production factors is the ________.

Costa Rica's recent economic transformation to depend more on high-tech manufacturing is largely due to its adoption of ________ trade policy.

In a short essay,discuss the theory of absolute advantage and the reasons a country's efficiency improves based on this theory.

Which of the following is most likely a basis for a Jamaican natural advantage in international trade?

Brain drain is a term that describes ________.

Countries with varied climates and varied natural resources generally ________ than countries with less varied climates and natural resources.

The comparative advantage theory holds that a country will gain from trade ________.

From an economic standpoint,why do production factors move from one country to another? How does factor movement affect international trade?

The free trade theories of specialization primarily assume that ________.

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.

Globalization and International Business

The Cultural Environments Facing Business

The Political and Legal Environments Facing Business

The Economic Environments Facing Businesses

Governmental Influence on Trade

Cross-National Cooperation and Agreements

Global Foreign-Exchange Markets

The Determination of Exchange Rates

Global Capital Markets

Globalization and Society

The Strategy of International Business

Country Evaluation and Selection

Export and Import

Direct Investment and Collaborative Strategies

The Organization of International Business

Marketing Globally

Global Manufacturing and Supply-Chain Management

International Accounting and Finance Issues

International Human Resource Management

Filters