Question 1

Consider the following two cases.In the first,a U.S.firm purchases 18% of a foreign firm.In the second,a U.S.firm builds a new production facility in a foreign country.Both are ,with the first referred to as _ and the second as _ .

Accepted Answer

The answer of Consider the following two cases.In the first,a...

Question 2

Intra- industry trade will tend to dominate trade flows when which of the following exists?

Accepted Answer

Intra-industry trade is more prevalent when countries have similar factor endowments and produce differentiated products, leading to trade in similar goods rather than completely different ones.

Question 3

A corporation is considered a multinational if _ .

Accepted Answer

A corporation is considered a multinational if it owns more than 10% of a foreign firm, indicating significant control or influence over the foreign entity.

Question 4

Product differentiation and internal economies of scale yield gains from trade in the form of

Accepted Answer

Product differentiation and internal economies of scale allow firms to produce at lower costs and offer a greater variety of goods, leading to gains from trade.

Question 5

An industry is characterized by scale economies,and exists in two countries.Should these two countries engage in trade such that the combined market is supplied by one country's industry,then

Accepted Answer

With scale economies, one country can produce more efficiently than two countries. By specializing in production, the combined market can be supplied by one country's industry, leading to lower prices and more varieties for consumers in both countries.

Question 6

Foreign outsourcing is

Accepted Answer

Foreign outsourcing refers to the practice of hiring external organizations or contractors in other countries to perform certain business functions or services.

Question 7

An industry is characterized by scale economies and exists in two countries.In order for consumers of its products to enjoy both lower prices and more variety of choice

Accepted Answer

Engaging in international trade allows each country to specialize and benefit from economies of scale, leading to lower prices and more variety for consumers.

Question 8

Two countries engaged in trade in products with no scale economies,produced under conditions of perfect competition,are likely to be engaged in

Accepted Answer

The answer of Two countries engaged in trade in products...

Question 9

A firm is more likely to engage in horizontal foreign direct investment if

Accepted Answer

A firm is more likely to engage in horizontal foreign direct investment when trade costs are high and there are internal economies of scale, as this allows the firm to produce closer to the market and reduce transportation costs while benefiting from cost advantages due to scale.

Question 10

When a multinational affiliate replicates production in a foreign country it is called foreign direct investment.

Accepted Answer

Horizontal foreign direct investment occurs when a multinational company replicates its production process in a foreign country, producing similar goods or services as it does in its home country.

Question 11

A firm's foreign direct investment.decisions are,in the case of horizontal FDI,strongly influenced by and,in the case of vertical FDI,strongly influenced by _.

Accepted Answer

Horizontal FDI is influenced by trade costs as firms replicate production in multiple countries to avoid these costs. Vertical FDI is influenced by production costs as firms seek cost efficiencies by locating different stages of production in different countries.

Question 12

Two countries engaged in trade in products with scale economies,produced under conditions of monopolistic competition,are likely to be engaged in

Accepted Answer

Intra-industry trade occurs when countries trade similar products that are differentiated by brand or quality, which is common in industries with economies of scale and monopolistic competition.

Question 13

A corporation is considered a multinational if _ .

Accepted Answer

The answer of A corporation is considered a multinational if...

Question 14

During the past decade,U.S.imports of business services have ,U.S.exports of business services have ,and U.S.net exports of business services have .

Accepted Answer

Over the past decade, U.S. imports and exports of business services have both increased, leading to an increase in net exports of business services.

Question 15

When a multinational affiliate replicates elements of a production process in a foreign country it is called foreign direct investment.

Accepted Answer

The answer of When a multinational affiliate replicates elements of...

Question 16

Trade without serious income distribution effects is most likely to happen

Accepted Answer

Trade in sophisticated manufactures between rich countries is less likely to have serious income distribution effects because these countries have similar levels of technology and capital, leading to balanced trade benefits.

Question 17

A product is produced in a monopolistically competitive industry with scale economies.If this industry exists in two countries,and these two countries engage in trade with each other,then we would expect

Accepted Answer

In a monopolistically competitive industry with scale economies, countries tend to specialize in different varieties of a product and trade these varieties with each other. This leads to intra-industry trade where each country exports different varieties of the same product.

Question 18

We often observe "pseudo- intra- industry trade" between the United States and Mexico.Actually,such trade is consistent with

Accepted Answer

The answer of We often observe "pseudo- intra- industry trade"...

Quiz 8: Firms in the Global Economy: Export Decisions,outsourcing,and Multinational Enterprises

Consider the following two cases.In the first,a U.S.firm purchases 18% of a foreign firm.In the second,a U.S.firm builds a new production facility in a foreign country.Both are ,with the first referred to as _ and the second as _ .

Intra- industry trade will tend to dominate trade flows when which of the following exists?

A corporation is considered a multinational if _ .

Product differentiation and internal economies of scale yield gains from trade in the form of

An industry is characterized by scale economies,and exists in two countries.Should these two countries engage in trade such that the combined market is supplied by one country's industry,then

Foreign outsourcing is

An industry is characterized by scale economies and exists in two countries.In order for consumers of its products to enjoy both lower prices and more variety of choice

Two countries engaged in trade in products with no scale economies,produced under conditions of perfect competition,are likely to be engaged in

A firm is more likely to engage in horizontal foreign direct investment if

When a multinational affiliate replicates production in a foreign country it is called foreign direct investment.

A firm's foreign direct investment.decisions are,in the case of horizontal FDI,strongly influenced by and,in the case of vertical FDI,strongly influenced by _.

Two countries engaged in trade in products with scale economies,produced under conditions of monopolistic competition,are likely to be engaged in

A corporation is considered a multinational if _ .

During the past decade,U.S.imports of business services have ,U.S.exports of business services have ,and U.S.net exports of business services have .

When a multinational affiliate replicates elements of a production process in a foreign country it is called foreign direct investment.

Trade without serious income distribution effects is most likely to happen

A product is produced in a monopolistically competitive industry with scale economies.If this industry exists in two countries,and these two countries engage in trade with each other,then we would expect

We often observe "pseudo- intra- industry trade" between the United States and Mexico.Actually,such trade is consistent with