Given the information in the table above, if wages were to double in Home, then Home should
A) export cloth.
B) export widgets.
C) export both and import nothing.
D) export and import nothing.
E) export widgets and import cloth.
Question 2 - The movement of production to affiliate firms outside of the country is known as outsourcing.
Indicate whether the statement is true or false
Question 3 - If a firm that uses a production process that yields economies of scale charges a price equal to ________, then profit will be ________.
A) marginal cost; negative
B) marginal revenue; maximized
C) marginal cost; maximized
D) marginal revenue; positive
E) marginal cost; positive
Question 4 - Which of the following is false?
A) International differences in tastes, if sufficiently large, could overturn the comparative advantage predictions of the HO model.
B) The classical and HO models make similar assumptions about international differences in technology.
C) The HO model predicts that some groups will be hurt by international trade.
D) Both the classical and the HO models predict that countries gain from international trade.
Question 5 - The European Union became an economic union with the implementation of which treaty?
A) Treaty of Rome
B) Single Europe Treaty
C) Delor's Agreement
D) Treaty on European Union
E) Schengen Agreement
Question 6 - During the 1990s, which of the following did NOT occur?
A) Private savings fell.
B) Investment rose.
C) Public savings increased.
D) The United States received capital inflows.
E) Private savings was greater than investment for most of the 1990s.
Question 7 - OLI theory is a direct contradiction of trade theory, especially trade theory based on comparative advantage.
Indicate whether the statement is true or false
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