Question 1

Figure 9.3 represents the Mexican labor market.Assume that labor and capital are the only factors of production.Also assume the initial supply schedule of labor is denoted by S0 and consists entirely of native Mexican workers.The demand schedule of labor is denoted by DMexico.
 
-Consider Figure 9.3.At labor market equilibrium,the payment to Mexican capital owners equals:

Accepted Answer

The answer of Figure 9.3 represents the Mexican labor market.Assume...

Question 2

Figure 9.3 represents the Mexican labor market.Assume that labor and capital are the only factors of production.Also assume the initial supply schedule of labor is denoted by S0 and consists entirely of native Mexican workers.The demand schedule of labor is denoted by DMexico.
 
-Consider Figure 9.3.If Honduran migration to Mexico results in the labor force increasing to 12 workers,denoted by schedule S1,the:

Accepted Answer

When the labor force increases due to migration, the supply of labor increases, leading to a decrease in the wage rate. As wages decrease, the cost of labor for capital owners decreases, potentially increasing their profits or payments.

Question 3

Exxon Oil Co.would undertake forward vertical integration if its retailing division acquired oil wells in the Middle East.

Accepted Answer

Forward vertical integration occurs when a company moves closer to the end consumer in its supply chain, such as a manufacturer acquiring a retailer. Acquiring oil wells would be backward vertical integration, as it involves moving upstream in the supply chain.

Question 4

Forward vertical integration would occur if a U.S.automobile manufacturer acquired a German subsidiary.

Accepted Answer

The question does not relate to the information presented in Figure 9.3 or the Mexican labor market. It is a separate question about vertical integration and the nationality of the subsidiary being acquired. The correct answer is false, as vertical integration would only occur if the subsidiary involved in the acquisition was involved in the same industry or supply chain as the acquiring company. Nationality alone does not determine whether an acquisition would constitute vertical integration.

Question 5

Canada views immigrants as:

Accepted Answer

Canada views immigrants both as friends and necessary to the Canadian economy. Canada is known to have a positive attitude towards multiculturalism and welcomes immigrants from around the world. At the same time, immigrants play a crucial role in Canada's economic and demographic growth, making them a necessary part of the Canadian society.

Question 6

Multinational corporations sometimes locate manufacturing subsidiaries abroad to avoid tariff barriers which would place their products at a competitive disadvantage in a foreign country.

Accepted Answer

Multinational corporations may establish manufacturing subsidiaries abroad to avoid tariff barriers and gain a competitive advantage in foreign markets. By producing goods locally, they can avoid high import duties or other trade barriers that would increase the cost of their products and make them less attractive in the host country. This strategy allows companies to maintain their market share and profitability, as well as to expand their operations and access new customers.

Question 7

Most vertical foreign investment,as implemented by multinational corporations,is "forward" in nature rather than "backward."

Accepted Answer

Most vertical foreign investment by multinational corporations is "backward" in nature, meaning it is primarily focused on accessing raw materials or inputs for their production processes, rather than "forward" investments which would involve investing in distribution or sales operations in foreign markets.

Question 8

International trade in goods and services and flows of productive factors are substitutes for each other.

Accepted Answer

The answer of International trade in goods and services and...

Question 9

"Guest worker" programs generally result in temporary migration of workers from:

Accepted Answer

"Guest worker" programs typically involve temporary migration of workers from impoverished nations to wealthy nations, where they are employed in industries that face labor shortages. This helps to satisfy labor demands in the hosts countries and provides opportunities for workers from the sending countries to earn higher wages and gain new skills.

Question 10

Figure 9.3 represents the Mexican labor market.Assume that labor and capital are the only factors of production.Also assume the initial supply schedule of labor is denoted by S0 and consists entirely of native Mexican workers.The demand schedule of labor is denoted by DMexico.
 
-Consider Figure 9.3.Policies that permit Honduran workers to freely migrate to Mexico would likely be resisted by:

Accepted Answer

Native Mexican workers would likely resist policies that permit Honduran workers to freely migrate to Mexico because they would face increased competition for jobs, which could lower wages and worsen working conditions. Mexican capital owners, on the other hand, may actually benefit from increased immigration because it could lower labor costs and increase profits. Therefore, the correct answer is B, only native Mexican workers would resist the policy.

Question 11

Horizontal integration would occur if General Motors sets up a subsidiary in Mexico to produce automobiles identical to those that it produces in the United States.

Accepted Answer

Horizontal integration refers to a company expanding its operations in the same industry by acquiring or merging with a competitor or setting up a subsidiary that produces the same product or service. In this scenario, General Motors is expanding its operations by setting up a subsidiary in Mexico to produce automobiles identical to those produced in the United States, which is an example of horizontal integration.

Question 12

____ refers to highly educated and skilled people who migrate from poor developing countries to wealthy industrial countries.

Accepted Answer

Brain drain refers to the emigration of highly educated and skilled individuals from a country, usually a developing one, to another country, usually a developed one, in search of better living standards and opportunities. This results in a loss of valuable talent and human capital for the home country, which can hinder its economic and social development.

Question 13

Foreign direct investment typically occurs when

Accepted Answer

Foreign direct investment occurs when a parent company invests and establishes a controlling ownership in a foreign-based subsidiary. This investment can be in the form of expanding existing production facilities or establishing new ones, investing in local resources, or purchasing or creating a completely new firm. Transferring jobs or closing foreign production plants would not be considered foreign direct investment, while purchasing foreign government bonds would be considered indirect investment rather than direct investment.

Question 14

Joint ventures may lead to

Accepted Answer

Joint ventures can have varying impacts on welfare depending on the context, market conditions, and how they are structured. They can lead to welfare increases through synergies and efficiencies, welfare decreases if they reduce competition, or no significant changes if the effects are neutral.

Question 15

American critics of U.S.multinational enterprises contend that they promote

Accepted Answer

American critics of U.S. multinational enterprises contend that they promote runaway jobs by shifting jobs to countries with lower labor costs, technology transfers abroad by transferring manufacturing processes and patents to foreign subsidiaries, and tax evasion by using complex strategies to shift profits to low-tax countries. Therefore, all of the above options are correct.

Question 16

Figure 9.2 represents the U.S.labor market.Assume that labor and capital are the only factors of production.Also assume the initial supply schedule of labor is denoted by S0 and consists entirely of native U.S.workers.The demand schedule of labor is denoted by D0.
Figure 9.2.U.S.Labor Market
 
-Consider Figure 9.2.Policies that permit Mexican workers to freely migrate to the United States would likely be resisted by:

Accepted Answer

Native U.S. workers would likely resist policies that permit Mexican workers to freely migrate to the United States because this would increase the supply of labor (shift S0 to the right) and decrease wages (move from point A to point B). This would lead to increased competition for jobs and potentially lower wages for native U.S. workers. However, U.S. capital owners may benefit from the lower wages and increased profits, so they may not necessarily resist such policies.

Question 17

Vertical integration occurs if a parent multinational corporation establishes foreign subsidiaries to produce intermediate goods or inputs that go into the production of a finished good.

Accepted Answer

Vertical integration involves owning or controlling different stages of the supply chain, including production of intermediate goods or inputs.

Question 18

Most multinational corporations have a low ratio of foreign sales to total sales,usually 5 percent or less.

Accepted Answer

According to various studies, most multinational corporations have a much higher ratio of foreign sales to total sales, usually in the range of 25-50 percent or more.

Question 19

Figure 9.3 represents the Mexican labor market.Assume that labor and capital are the only factors of production.Also assume the initial supply schedule of labor is denoted by S0 and consists entirely of native Mexican workers.The demand schedule of labor is denoted by DMexico.
 
-Consider Figure 9.3,at labor market equilibrium with supply S0,_____ workers are hired at a wage rate of $____ per hour,while total wages equal ____.

Accepted Answer