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Page 21
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Factor Endowments as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
49. The factor endowment theory assumes
a.
Same tastes and preferences
b.
Factor inputs of uniform quality
c.
Same technology
d.
All of the above
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Factor Endowments as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
50. In explaining international trade, the product life cycle theory focuses on
a.
Tastes and preferences
b.
The role of technological innovation
c.
Per-capita income levels of nations
d.
Both b and c
ANSWER:
b
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Technology as a Source of Comparative Advantage: The Product Cycle Theory
KEYWORDS:
BLOOM’S: Understand
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DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
Figure 3.1 China – US Trade Possibilities
51. Considering Figure 3.1 prior to trade both China’s and the US production of textiles and aircraft is 19 and 9. Which of
the following represents the pre-trade situation?
a.
b.
c.
d.
ANSWER:
a
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 3.1
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Factor Endowments as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:18 PM
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Page 23
DATE MODIFIED:
6/22/2016 3:18 PM
52. Considering Figure 3.1 which of the following would be true?
a.
China has more of both labor and capital than the US.
b.
The US has more of both labor and capital than China.
c.
The US is relatively capital abundant and China is relatively labor abundant.
d.
The US is relatively labor abundant and China id relatively capital abundant.
ANSWER:
c
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 3.1
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Factor Endowments as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
53. Considering Figure 3.1, what are the terms of trade represented?
a.
The terms of trade are 1½ aircraft per textile.
b.
The terms of trade are 1½ textiles per aircraft.
c.
The terms of trade are 1 textile per aircraft.
d.
The terms of trade are 2/3 textile per aircraft.
ANSWER:
b
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 3.1
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Factor Endowments as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
54. According to Ricardian theory, comparative advantage depends on relative differences in labor productivity.
a.
True
b.
False
ANSWER:
True
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Page 24
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Factor Endowments as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
55. The Heckscher-Ohlin theory asserts that relative differences in labor productivity underlie comparative advantage.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Factor Endowments as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
56. The factor-endowment theory highlights the relative abundance of a nation’s resources as the key factor underlying
comparative advantage.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Factor Endowments as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
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Page 25
DATE MODIFIED:
6/22/2016 3:18 PM
57. According to the factor-endowment theory, a nation will export that good for which a large amount of the relatively
scarce resource is used.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Factor Endowments as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
58. According to the factor-endowment theory, a nation will import that good for which a large amount of the relatively
abundant resource is used.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Factor Endowments as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
59. The Heckscher-Ohlin theory suggests that land-abundant nations will export land-intensive goods while labor-
abundant nations will export labor-intensive goods.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
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Page 26
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Factor Endowments as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
60. The Heckscher-Ohlin theory contends that over a period of years a country that initially is an exporter of a product
will become an importer of that product.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Factor Endowments as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
61. The Heckscher-Ohlin theory emphasizes the role that demand plays in the creation of comparative advantage.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Factor Endowments as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
62. The factor-endowment theory asserts that with specialization and trade there tends to occur an equalization in the
relative resource prices of trading partners.
a.
True
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Page 27
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Factor Endowments as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
63. According to the factor-endowment theory, international specialization and trade cause a nation’s cheap resource to
become cheaper and a nation’s expensive resource to become more expensive.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Factor Endowments as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
64. Fears about the downward pressure that cheap foreign workers place on U.S. wages have led U.S. labor unions to
lobby for import restrictions such as tariffs and quotas.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Factor Endowments as a Source of Comparative Advantage
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Page 28
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
65. According to the factor-price-equalization theory, international trade results in the relative differences in resource
prices between nations being eliminated.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Factor Endowments as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
66. Empirical testing by Wassily Leontief gave support to the Heckscher-Ohlin theory of trade.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Skill as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
67. The Leontief Paradox was the first major challenge to the product-life-cycle theory of trade.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
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Page 29
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Skill as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
68. The Leontief Paradox suggested that, in contrast to the predictions of the factor-endowment theory, U.S. exports were
less capital-intensive than U.S. import-competing goods.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Skill as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
69. The specific-factors theory analyzes the income distribution effects of trade in the short run when resources are
immobile among industries.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Factor Endowments as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
70. Owners of resources specific to export industries tend to lose from international trade, while owners of factors specific
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Page 30
to import-competing industries tend to gain.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Factor Endowments as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
71. The factor-price-equalization theory is a short-run version of the specific-factors theory.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Factor Endowments as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
72. With economies of scale, specialization in a few products allows a manufacturer to benefit from longer production
runs which lead to decreasing average cost.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
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Page 31
TOPICS:
Economies of Scale and Comparative Advantage
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
73. With decreasing costs, a country has an incentive to partially specialize in the product of its comparative advantage.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Economies of Scale and Comparative Advantage
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
74. By widening the size of the domestic market, international trade permits companies to take advantage of longer
production runs and increasing efficiencies such as mass production.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Economies of Scale and Comparative Advantage
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
75. The theory of overlapping demands applies best to trade in manufactured goods.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Challenging
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Page 32
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Overlapping Demands as a Basis for Trade
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
76. Decreasing cost conditions lead to complete specialization in the production of the commodity of comparative
advantage.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Economies of Scale and Comparative Advantage
KEYWORDS:
BLOOM’S: Apply
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
77. According to Staffan Linder, the factor endowment theory is useful in explaining trade patterns in manufactured
goods, but not primary products.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Overlapping Demands as a Basis for Trade
KEYWORDS:
BLOOM’S: Apply
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
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Page 33
78. The theory of overlapping demands asserts that trade in manufactured goods is stronger the less similar the demand
structures of two countries.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Overlapping Demands as a Basis for Trade
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
79. The theory of overlapping demands contends that international trade in manufactured products is strongest among
nations with similar income levels.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Overlapping Demands as a Basis for Trade
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
80. According to the theory of overlapping demands, trade in manufactured goods would be greater among two wealthy
countries than among a wealthy country and a poor country.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
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Page 34
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Overlapping Demands as a Basis for Trade
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
81. Recent studies of U.S. resource endowments indicate that the United States is most abundant in unskilled labor,
followed by semi-skilled labor and skilled labor.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Skill as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
82. Intra-industry trade would occur if computers manufactured in the United States by IBM are exported to Japan while
the United States imports computers manufactured by Hitachi of Japan.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Intra-industry Trade
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
83. Because seasons in the Southern Hemisphere are opposite those in the Northern Hemisphere, one would expect intra-
industry trade to occur in agricultural products.
a.
True
b.
False
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Page 35
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Intra-industry Trade
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
84. Intra-industry trade can be explained by product differentiation, economies of scale, seasons of the year, and
transportation costs.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Intra-industry Trade
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
85. According to the theory of intra-industry trade, many manufactured goods undergo a trade cycle in which the home
country initially is an exporter and eventually becomes an importer of a product.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Intra-industry Trade
KEYWORDS:
BLOOM’S: Understand
Copyright Cengage Learning. Powered by Cognero.
Page 36
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
86. The product-life-cycle theory applies best to trade in primary products in the short run.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Technology as a Source of Comparative Advantage: The Product Cycle Theory
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
87. According to the product-life-cycle theory, the first stage of a product’s trade cycle is when it is introduced to the
home market.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Technology as a Source of Comparative Advantage: The Product Cycle Theory
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
88. According to the product life cycle theory, the last stage of a product’s trade cycle is when it becomes an import-
competing good.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
Copyright Cengage Learning. Powered by Cognero.
Page 37
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Technology as a Source of Comparative Advantage: The Product Cycle Theory
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
89. Ricardo’s theory of comparative advantage is a static theory that does not consider changes in international
competitiveness over the long run.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Factor Endowments as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
90. Dynamic comparative advantage refers to the creation of comparative advantage through the mobilization of skilled
labor, technology, and capital.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Factor Endowments as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
91. Industrial policy seeks to direct resources to declining industries in which productivity is low, linkages to the rest of
the economy are weak, and future competitiveness is remote.
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Page 38
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Dynamic Comparative Advantage: Industrial Policy
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
92. Europe’s jumbo-jet manufacturer, Airbus, has justified receiving governmental subsidies on the grounds that the
subsidies prevent the United States from becoming a monopoly in the jumbo-jet market.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
WTO Rules Illegal Government Subsidies Support Boeing and Airbus
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
93. The imposition of pollution-control regulations on domestic steel manufacturers leads to decreases in production costs
and an improvement in the steel manufacturers’ competitiveness.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
Copyright Cengage Learning. Powered by Cognero.
Page 39
TOPICS:
Government Regulatory Policies and Comparative Advantage
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
94. Empirical studies conclude that U.S. environmental policies are a more important determinant of trade performance
than capital, raw materials, labor skills, and wages.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Government Regulatory Policies and Comparative Advantage
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
95. Although the theory of comparative advantage explains trade in manufactured goods, it has no explanatory value for
trade in business services.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Factor Endowments as a Source of Comparative Advantage
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
96. Most developing countries have pollution-control laws and enforcement policies that are more stringent than those of
the major industrial countries.
a.
True
b.
False
ANSWER:
False
POINTS:
1