E452exs3F09

E452exs3F09 - Name FINAL EXAM Economics 452 International...

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N a m e FINAL EXAM Economics 452 International Trade Theory and Policy Fall 2009 1 FACTOR MOBILITY 1-4 The United States and Mexico produce corn using labor and land and share the same technology. Initially, the U.S. wage is higher in than in Mexico. Consider the effects of allowing labor to move freely between the two countries, with no barriers to migration. 1. How must the ratio of labor to land in the United States compare to that in Mexico before migration occurs? a) higher in the United States b) lower in the United States c) the same as in Mexico d) higher in the United States or the same as in Mexico e) cannot tell from the information given 2. How will the ratio of labor to land in the United States compare to that in Mexico after migration occurs? a) higher in the United States b) lower in the United States c) the same as in Mexico d) higher in the United States or the same as in Mexico e) cannot tell from the information given 3. Who benefits in the United States? a) workers b) landowners c) workers and landowners d) neither workers nor landowners e) cannot tell from the information given 4. Who benefits in Mexico? a) all workers, regardless of whether they leave or stay b) only workers who stay c) only workers who leave d)
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FOREIGN DIRECT INVESTMENT 5-8 A German firm is deciding how to serve the U.S. market for lightbulbs. 5. Which of the following is an ownership advantage? a) concern that a licensee would skimp on quality b) lower labor costs in the United States than in Germany c) higher quality light bulbs that last longer than the competition d) superior process technology with lower costs than rivals e) c) or d) 6. Which of the following is a location advantage? a) concern that a licensee would skimp on quality b) lower labor costs in the United States than in Germany c) higher quality light bulbs that last longer than the competition d) superior process technology with lower costs than rivals e) b) or d) 7. Which of the following is an internalization advantage? a) concern that a licensee would skimp on quality b) lower labor costs in the United States than in Germany c) higher quality light bulbs that last longer than the competition d) superior process technology with lower costs than rivals e) a) or d) 8. If the firm chooses to establish a production subsidiary in the United States, which type of advantage must be missing? a)
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This note was uploaded on 02/13/2012 for the course ECON 452 taught by Professor Vacaflores during the Spring '06 term at Texas A&M.

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E452exs3F09 - Name FINAL EXAM Economics 452 International...

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