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MKT 310 Exam 2 || with Errorless Solutions 100%.

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What are two reasons diminishing returns to specialization occur? correct answers different goods use resources in different proportions not all resources are the same quality According to the Samuelson critique, middle class wages in the United States will be _____ as the result of the offsh...

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MKT 310 Exam 2 || with Errorless Solutions 100%.
What are two reasons diminishing returns to specialization occur? correct answers different
goods use resources in different proportions

not all resources are the same quality

According to the Samuelson critique, middle class wages in the United States will be _____ as
the result of the offshoring of service jobs and rapid advances in foreign labor productivity.
correct answers diminish

What is the likely result for the gains from specialization according to the concept of diminishing
returns? correct answers Gains are likely to be exhausted before specialization is complete.

Free trade can result in dynamic gains that ______ economic growth. correct answers stimulate

Which type of returns to specialization happen when additional units of resources are required to
produce each additional unit? correct answers diminishing

Samuelson is concerned that advances in communications technology will result in the correct
answers offshoring service jobs

What aspect of free trade does Samuelson see as a potential negative influence on international
trade? correct answers offshoring service jobs such as call centers

What concept negates the idea that a country can specialize to the degree suggested by the
Ricardian model? correct answers diminishing returns

Sachs and Warner found a strong correlation between a(n) ______ response to trade and
economic growth. correct answers open

To shift a country's production possibility frontier outward, it is necessary to correct answers inc
stock and efficiency

Heckscher and Ohlin identified differences in national factor endowments as the root of ______.
correct answers comparative advantage

What theory argues that free trade is beneficial, but that differences in factor endowments, not
productivity, determine the pattern of international trade? correct answers heckscher-ohlin

Wealthy country A enters into a free trade agreement with poor country B. Country B improves
its productivity. Country A pays lower prices for goods imported from poor country B. However,
Samuelson expresses concern that these lower prices may not offset possible ______ in wealthy
country A. correct answers lower real wage rates

,In the study by MIT economist David Autor noted in the text, it was found that regions of the
United States with greater exposure to competition from Chinese manufacturers saw _____
employment. correct answers declining

According to Heckscher and Ohlin, each country has certain ______, such as land, labor, and
capital. correct answers factor endowments

One explanation for the Leontief paradox is that the US has an advantage and exports goods
produced with correct answers innovative technologies.

Which theory was based on the observation that early in the development of a commodity, all the
parts and labor come from the area in which it was invented? correct answers product life-cycle

The Leontief paradox would be used to explain which of these situations? correct answers The
US exports goods that require skilled labor and imports heavy manufacturing products that
require large amounts of capital.

Which theory is said to predict trade patterns more accurately? correct answers Ricardo

What are three sources of economies of scale? correct answers the ability of large-volume
producers to use more effective, specialized employees

spreading fixed costs over a larger volume

the ability of large-volume producers to use more specialized equipment

According to product life-cycle theory, as products mature, ______ considerations become far
more important in the competitive process. correct answers cost

______ theory states that, because of economies of scale, trade can increase the variety of goods
available and decrease the average cost of these goods. correct answers new trade

The reductions in the cost of a single unit that result from large scale output of that product are
called correct answers economies of scale

The ethnocentric view that most new products are developed and introduced in the US is a key
weakness in the ______ theory. correct answers product life-cycle

Which theory states that for products where economies of scale are significant and that control a
substantial amount of world demand, the first movers in an industry can gain a scale-based cost
advantage NOT available to late entrants? correct answers new trade

Which theory implies that the global market may only be able to support a limited number of
firms in industries when the output required to attain economies of scale represents a significant
amount of total world demand? correct answers new trade theory

, The development of the superjumbo jet by Airbus, which basically shuts out other producers of
this type of aircraft, demonstrates the idea of a(n) ______ based on scale economies because the
global market can probably only support one producer of superjumbo aircraft. correct answers
first-mover advantage

What two simultaneous outcomes are implied by new trade theory? correct answers a nation can
lower the cost of the goods being offered to consumers

a nation can increase the variety of goods available to consumers

Which trade theory has these implications: (1) nations may benefit from trade even when they do
not differ in resource endowments or technology; and (2) specialization allows for scale
economies and lower production costs? correct answers new trade
Luck
Entrepreneurship
Innovation

What three predictions of new trade theory regarding trade patterns are supported by studies?
(Check all that apply.) correct answers Trade increases the variety of products available.

Trade increases the specialization of production within an industry.

Trade leads to lower average costs.

According to new trade theory, the first mover's ability to benefit from increasing returns ______
for other firms. correct answers create barriers to entry

Besides the four broad attributes of a nation that shape the environment in which local firms
compete, what two additional variables did Porter discuss that can influence the national
diamond? (Check all that apply.) correct answers chance
government

Choose three advanced factors that Porter believes are MOST significant for competitive
advantage. (Check all that apply.) correct answers Research facilities
Technological know-how
Skilled labor

According to the theory of international trade, it makes sense for a company to disperse its
production to those countries where correct answers they can be performed most efficiently

Which aspect of Porter's Diamond is best evidenced by the US semiconductor industry providing
the basis for US success in the production of personal computers? correct answers related and
supporting industries

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