81. Most economists prefer the Heckscher-Ohlin theory to Ricardo’s theory because:
82. U.S. exports are less capital-intensive than U.S. imports, despite the relative abundance
of capital in the country. This phenomenon that runs contrary to the prediction of the Heckscher-
Ohlin theory is termed as _____.
83. Which of the following is most likely to be a possible explanation for the Leontief paradox
observed in the case of the United States?
84. One of the drawbacks of the Heckscher-Ohlin theory is that:
85. One of the key assumptions of the Heckscher-Ohlin theory is that:
86. On which of the following observations was Raymond Vernon’s product life-cycle theory
based?
87. According to the product life-cycle theory, the high cost of U.S. labor gave U.S. firms an
incentive to:
88. Vernon argues that pioneering firms in the United States kept production facilities closer
to the market and centers of decision making because:
89. According to Vernon, which of the following factors obviates the need for pioneering U.S.
firms to look for low-cost production sites in other countries?
90. Vernon argues that early in the life cycle of a typical new product, while demand is
starting to grow rapidly in the United States, demand in other advanced countries:
91. Vernon predicts that as the demand for a new product starts to grow in other advanced
countries, in the long run,:
92. Vernon theorizes that as the market in the U.S. and other advanced nations matures:
93. According to Vernon, which of the following influences the movement of the locus of
global production from advanced countries to developing countries?
94. According to the product life-cycle theory, the locus of global production initially switches
from the United States to other advanced nations and then from those nations to developing
countries. Which of the following is most likely to be a consequence of these trends?
95. Which of the following is a drawback of the product life-cycle theory?
96. The _____ theory began to emerge when economists pointed out that the ability of firms
to attain economies of scale might have important implications for international trade.
97. _____ are unit cost reductions associated with a large scale of output.
98. New trade theory argues that, through its impact on economies of scale, trade can:
99. The _____ theory states that in those industries where the output required to attain
economies of scale represents a significant proportion of total world demand, the global market
may be able to support only a small number of enterprises.
100. The new trade theory states that: