Exam 5: International Trade and Factor-Mobility Theory

All countries face the questions of what,how much,and with whom they should import and export.How they answer these questions primarily affects whether ________.

What is the theory of country size? How is country size determined? How does country size affect national trade patterns?

The term brain drain describes the export of high-technology products in exchange for low-technology products.

Which of the following statements about Costa Rica and its approach to trade and factor-mobility strategy is true?

The existence of the four favorable conditions of the diamond of national advantage does not guarantee that an industry will develop in a given locale.

According to the theory of comparative advantage,a country gains from foreign trade even though it may have an absolute advantage in the production of all products because ________.

Costa Rica applied the concepts of the diamond of national advantage theory to help transform its economy by ________.

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

Under the theory of absolute advantage,countries hold two types of advantages-acquired advantages and technological advantages.

An exception to the PLC theory in terms of production location is often a product with very rapid change in innovation.

What is the country similarity theory? According to this theory,what factors affect trade patterns?

The most internationally mobile factor of production is ________.

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

Which of the following UNDESIRABLE results will most likely occur for a country running a favorable balance of trade?

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?

Assume the following conditions: In the United States it takes 5 units of resources to produce a ton of potatoes and 10 to produce a ton of coal.In Canada it takes 6 units of resources to produce a ton of potatoes and 9 to produce a ton of coal.According to the theory of absolute advantage,________.

Luxury products are the most likely types of products to behave according to the product life cycle theory of trade.

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

As a leading exporter of luxury automobiles,Germany has built a strong reputation in engineering.Germany's trade most likely relies on a(n)________.

Which of the following assumptions was made in the original theories of absolute and comparative advantage?