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Study Resources (Business Management)

71Which of the following does NOT reflect a long-run impact of labor immigration? •an increase in production in the labor-intensive industry •a decrease in production in the capital-intensive  industry •a shift of labor and capital into labor-intensive industries •the PPF shifts inward 72In the Heckscher-Ohlin model with two goods and.
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151An increase in the index of intra-industry trade implies that there has been an increase in the country's exports in that industry. •True •False 152The Heckscher-Ohlin model is a good predictor of trade patterns for industries with high values of the index of intra- industry trade. •True •False 153In the Ricardian and.
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91Using data from Trade Adjustment Assistance claims, we can make an accurate estimate of: •the variety of products U.S. consumers import from Mexico. •U.S. exports to Mexico that give Mexican consumers more product variety. •the barriers to trade erected by affected firms.   •the unemployment caused by NAFTA. 92Approximately how many U.S..
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131Perfectly competitive firms can influence the price that they charge. •True •False 132The price set by a profit-maximizing monopolist will exceed its marginal cost of producing the last unit. •True •False 133Perfectly competitive firms can produce differentiated products. •True •False 134The average cost of producing 100 units for.
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(Figure: The Import-Competing Industry) In the figure, with free trade, if the world price of the product is $15, then the total consumer surplus is: •$1,395. •$697.50.    •$22.50. •$2,250. (Figure: The Import-Competing Industry) In comparison to a no-trade situation, with free trade, producer surplus __________ to _________. •increases; $75 •decreases; $75 •increases;.
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121Larger countries will trade more with one another; this is empirically supported by the: •intra-industry trade. •increasing returns to scale. •gravity equation. •comparative advantage. •the inverse of the average GDPs times transportation costs. •the sum of GDPs times total exports. •the product of the GDPs in two nations divided by.
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41We can measure producer and consumer surplus by looking at the supply and demand graphical representation. Producer surplus is: •the area above the supply curve but below the equilibrium price. •the area below the demand curve but greater than the equilibrium price. •the area below the demand curve all the.
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•two consumers buy the product. •two firms sell the product. •one firm sells the product and one consumer buys the product. •two firms sell the product and two consumers buy the product. 22If there is a duopoly and the products are identical (homogeneous), the firm selling the product for a lower.
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101As trade takes place, imports will force firms to decrease price and production and lay off resources, which will be absorbed by the other industry at a lower wage (rental price). The result is that: •unfortunately, neither industry can afford to hire laid-off resources. •the lower wage makes it possible.
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31When there are increasing returns to scale, average costs must be: •falling. •rising. •constant. •falling, then rising. 32Whenever a firm's marginal costs are less than its average costs, its average costs must be: •falling. •rising. •constant. •falling, then rising. 33Increasing returns to scale and declining average costs result from.
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1The United States recently levied tariffs on tires imported from what country? •Japan •Brazil •Russia •China 2Import tariffs are ___________ on imports, and import quotas are ____________ on imports. •subsidies; taxes •limits; subsidies •taxes; limits •limits; taxes •General Agreement on Taxes and Tariffs. •General Agreement on Tariffs and Trade. •General.
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11Increasing returns to scale occurs when a firm's: •average costs of production increase as its output increases. •average costs of production decrease as its output increases. •average fixed costs increase as its output increases.   •marginal costs increase as its output increases. 12A feature of imperfect competition is _________, which means .
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•a takeover of an existing company. •construction of a new factory in a foreign company. •the hiring of at least 25 workers in a foreign company. •renting space in an office building. 92Modeling FDI movement from one nation to another, if we use the short-run (specific-factors) model, the wages.
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151General Motor's construction of a plant to produce Buicks in China is an example of U.S. foreign direct investment. •True •False 152In the long run, the output of the capital-intensive good will increase if the amount of capital increases in a country due to FDI. •True •False 153In the short-run,.
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21To help its domestic producers, the United States unilaterally raised tariffs on ____ in early 2002, but after a ruling against the United States by the WTO, it was forced to rescind the tariff. •autos •steel •oil •dairy products 22Normally the WTO does not allow discriminatory treatment in trade.
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141The Heckscher-Ohlin model is a long-run model in which labor, capital, and other resources can move freely between industries and across countries. •True •False 142In the Heckscher-Ohlin model labor cannot move across countries, but capital is mobile internationally. •True •False 143In the Heckscher-Ohlin model, countries trade because the available resources.
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101For which product below would you expect the index of intra industry trade to be lowest? •golf clubs •automobiles •whiskey •natural gas 102If the index of intra-industry trade is high, products are probably ______ , and costs in both nations are ______ . •identical; different •differentiated; similar •identical; similar •differentiated; different.
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91Which of the following taxes is easiest to collect? •income taxes •wealth taxes •tariffs •value-added taxes 92Lower-income countries have reduced their dependence upon _____________ over the past 20 to 30 years. •income taxes •wealth taxes •tariffs •value-added taxes •it discourages domestic production. •it reduces the benefits for domestic producers. •it is.
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11One feature of the GATT and now the WTO is that all member nations get the same treatment from their trading partners in terms of trade rules and restrictions. This provision is called: •beggar thy neighbor. •the good neighbor policy. •rotating obligations. •normal trade relation (formerly, most favored nation) status. •a.
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51SCENARIO: A MONOPOLIST'S MARKET A monopolistically competitive firm faces demand given by this equation: P = 50 – Q. It has no fixed costs and its marginal cost is $20 per unit. (Scenario: A Monopolist's Market ) What is the value of the firm's monopoly profits when it sets a price.
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111SCENARIO: CHILE AND THE UNITED STATES Chile and the United States use capital and labor to produce wheat and automobiles. The United States is capital abundant, and Chile is labor abundant. Wheat production is more labor intensive than automobile production. (Scenario: Chile and the United States) According to the Heckscher-Ohlin model: •Chilean workers.
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1 The Mariel boatlift of Cuban immigrants into Miami caused the: •population of unskilled workers in Miami to decline. •population of skilled workers in Miami to decline. •supply of labor to increase, but it did not decrease the wages. •wages of all workers to decline. •increased the population of Israel.
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1Suppose that imports and exports in an industry are $100 million and $200 million, respectively. Will the index of intraindustry trade for this industry rise, fall, or remain unchanged if exports fall to $100 million? •rise •fall •remain unchanged •There is not enough information to determine how the index will change..
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61The Home import demand curve is downward sloping because: •as the government forces the price down, the consumers buy more. •foreign companies want to help domestic competitors. •as the price falls below domestic equilibrium, the shortage in demand is filled by importing more quantity from abroad. •consumers can control the price.
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61In the long run (the HO model), immigration will lead to: •an increase in the price of both the labor-intensive and the capitalintensive goods in the receiving country. •an increase in the price of the labor-intensive good and a decrease in the price of the capital-intensive good in the receiving country..
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141 In the United States, NAFTA has benefited the economy because workers gained more than U.S. consumers. •True •False 142The Ricardian model and the Heckscher-Ohlin model show that countries will export commodities that they also import in order to maximize gains. •True •False 143Monopolistic competition suggests that under free trade each .
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151One commonly accepted explanation of the Leontief paradox is that the United States is abundant in skilled labor. •True •False 152The Stolper-Samuelson theorem indicates that an increase in the relative price of a good will cause the real earnings of labor and capital to move in opposite directions. •True •False 153The.
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(Figure: Consumer Surplus) When the price of the product is $15, the consumer surplus is: •$416. •$208. •$13. •$15. (Figure: Consumer Surplus) If the price of the product decreases to $10, the consumer surplus increases by: •$378. •$208. •$420. •$170. 33When consumers are able to buy a product at a price lower.
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41The effect of immigration on industry output in the short run is: •to lower it across all industry. •to raise it in sectors that do not get immigrant workers but lower it where immigrants are employed. •that, surprisingly, additional workers are employed, but there is no effect on industry output. •that.
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111 The higher the value for the index of intra-industry trade: •the lower total trade is for other products.   •the greater percentage of trade in that good is intraindustry. •the more we should be concerned about job loss and outsourcing. •the higher the gains from trade. •level of bilateral trade. •level.
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11The specific-factors model predicts that after immigration, the equilibrium wage in both industries in the destination nation: •rises. •falls. •remains the same. •cannot be determined with the information given. 12If a person leaves Sweden to work in the United States, she is said to ________from Sweden and __________to the.
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51Immigration will lead to a rightward shift in the receiving country's production possibilities frontier. As a result, this shift will: •favor the labor-intensive good. •favor the capital-intensive good. •equally favor the labor-intensive and the capital-intensive  good. •cause an increase in the production of the labor-intensive good and a decrease in the.
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111SCENARIO: TRADE IN GOODS BETWEEN CHINA AND THE UNITED STATES (1) China has 1,000 units of capital and 3,000 workers; (2) the United States has 3,000 units of capital and 1,000 workers; (3) clothing production is labor intensive; and (4) chemical production is capital intensive. (Scenario: Trade in Goods Between China and the United States).
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21Which group of U.S. citizens competes with illegal immigrants in the United States? •medical doctors •high school dropouts •college graduates •all U.S. citizens •keep out undocumented workers. •encourage bright U.S. college students to study abroad.  •attract scientists and engineers from other nations to help U.S. industry prosper. •have a way.
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31In the specific-factors model, migration of labor will cause: •the wage to rise in the receiving country and the wage to fall in the sending country. •the wage to fall in the receiving country and the wage to rise in the sending country. •the wage to rise in both the receiving and.
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71When firms behave like monopolistic competition, trade benefits consumers in two ways: •better quality products, increased information •higher incomes, more dependable products •lots of bells and whistles, higher wages •lower prices, more variety 72Under free trade and monopolistic competition, the following is likely: •Domestic firms will always be provided cash.
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131Economists conclude that the effect on our world's standard of living as a result of labor and capital migration has been: •negative overall. •positive overall as resources move to their highest-valued use. •positive in some respects but very harmful in the long run to workers. •so small worldwide that the.
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141In the long run, capital is mobile among countries. •True •False 142“Gastarbeiters” are illegal immigrant workers in Germany. •True •False 143Owners of capital and land usually support the reduction of restrictions on immigration. •True •False 144If wages rise due to immigration, the marginal products of the specific factors (capital and land).
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111When a large country imposes a tariff, the burden is often shared by: •foreign consumers and domestic producers. •domestic consumers and foreign producers. •all producers and consumers in each nation equally. •its government. •its economic welfare may increase. •its economic welfare must always fall. •its economic welfare will increase if.
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81In the long run, which of the following will occur if the U.S. federal government eliminates restrictions on migration of Mexican workers to the United States? •U.S. production of labor-intensive goods will increase. •U.S. production of both labor-intensive and capital-intensive goods will increase. •U.S. production of capital-intensive goods will increase. •Mexican production.
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81Studies of U.S.-Canadian free trade have concluded that the number of new jobs created in Canadian manufacturing were _________ the number of jobs lost elsewhere in Canadian manufacturing due to free trade. •less than •equal to •greater than •substantially greater than 82Since NAFTA was signed, Mexico saw the productivity of its .
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101In the short run, assuming there are two sectors in an economy, agriculture and manufacturing, an increase in the FDI in the manufacturing sector will cause the production possibility frontier to: •shift outward for both sectors. •shift inward. •shift outward for manufacturing only. •stay the same. 102In the short run,.
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71SCENARIO: FINNISH STEEL Suppose that the free-trade price of a ton of steel is ?500. (Note: ? is the symbol for the euro, a common currency used in 16 European countries, including Finland.) Finland, a small country, imposes a ?60 per-ton specific tariff on imported steel. With the tariff, Finland produces 300,000.
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101One estimate of the deadweight losses of the 2002 U.S tariffs on imported steel is: •$185 trillion. •$185 billion. •$185 million. •$185,000. 102U.S. consumers were hurt by the 2002 steel tariff; U.S. producers who use steel were also hurt, but the biggest outcry came from: •exporters of steel to the United States—Europe,.
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61In monopolistic competition, when trade is opened, if the nations have similar tastes, technology, products, and costs, the outcome is that: •no trade is possible. •consumers are left with no choices. •each firm has a larger market in which to sell, and consumers have more choices of sellers and products.   •transportation.
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