QUESTION According to Vernon, which of the following influences the movement of the locus of global production from advanced countries to developing countries? A. Cost considerations B. Factor endowments C. Domestic competition D. Supporting industries E. Firm structure ANSWER A
Date: September 3rd, 2020
QUESTION According to the product life-cycle theory, the locus of global production initially switches from the United States to other advanced nations and then from those nations to developing countries. Which of the following is most likely to be a consequence of these trends? A. U.S. imports become less capital-intensive than U.S. exports. B. The […]
Date: September 3rd, 2020
QUESTION Which of the following theories began to emerge when economists pointed out that the ability of firms to attain economies of scale might have important implications for international trade? A. Comparative advantage B. Heckscher-Ohlin C. New trade D. Product life-cycle E. Absolute advantage ANSWER C
Date: September 3rd, 2020
QUESTION Which of the following are unit cost reductions associated with a large scale of output? A. Comparative advantages B. Factor endowments C. Economies of scale D. Diminishing returns E. Absolute advantages ANSWER C
Date: September 3rd, 2020
QUESTION New trade theory argues that, through its impact on economies of scale, trade can: A. increase the average costs of goods. B. enable the global market to support a wide range of enterprises. C. negatively affect the first-mover advantage for all products. D. increase the variety of goods available to consumers. E. prevent diminishing […]
Date: September 3rd, 2020
QUESTION According to the new trade theory, trade, through its impact on economies of scale, is most likely to: A. reduce the volume of the goods produced. B. decrease the variety of goods available to consumers. C. decrease the average costs of goods. D. inhibit first-mover advantages in all industries. E. benefit only nations that […]
Date: September 3rd, 2020
QUESTION The new trade theory states that: A. the locus of global production initially switches from the United States to other advanced nations. B. world trade in certain products may be dominated by countries whose firms were first movers in their production. C. differences in technology may lead to differences in productivity, which in turn […]
Date: September 3rd, 2020
QUESTION Which of the following is a result of certain products having small national markets, in the absence of trade? A. The variety of products available to consumers increases. B. Limited demand for such products leads to non-realization of economies of scale. C. Each nation will specialize in producing a narrower range of products than […]
Date: September 3rd, 2020
QUESTION Which of the following suggests that consumers in all nations can consume more if there are no restrictions on trade? A. The Heckscher-Ohlin theory B. Mercantilism C. Leontief’s paradox D. Ricardo’s theory of comparative advantage E. The Samuelson critique ANSWER D
Date: September 3rd, 2020
QUESTION The difference between Ricardo’s theory and the Heckscher-Ohlin theory is that the Heckscher-Ohlin theory: A. makes more simplifying assumptions. B. cannot be subjected to empirical tests. C. actually predicts trade patterns with greater accuracy. D. argues that the pattern of international trade is determined by differences in national factor endowments. E. suggests that trade […]
Date: September 3rd, 2020
