AFM131 Midterm: D It has the chapeter+class review for Chps.3, 4, 6, 7, 14, 15
Get access
Related Documents
Related Questions
Companies at the fourth stage of developing their globalbusiness:
A. | set up foreign subsidiaries to handle sales in one country. | |
B. | operate in one country and sell into others. | |
C. | operate an entire line of business in another country. | |
D. | have their top executives and core corporate functions locatedin different countries, |
Which of the following statements is true of the termquota?
A. | It refers to a limit on the amount of a specific product thatcan enter a country. | |
B. | It refers to the exclusion of all products from certaincountries or companies. | |
C. | It refers to a tax levied on the goods entering a country. | |
D. | It refers to an agreement to stimulate international trade. |
Which term refers to the difference between the value of acountry’s exports and the value of its imports over a givenperiod?
A. | Balance of trade | |
B. | Balance of payment | |
C. | Gross domestic product | |
D. | Gross national product |
Consider two neighboring island countries, Botoga and Fiatstan.Each has 72,000 labor hours available per week that it can use toproduce jeans, wheat, or a combination of both. The following tableshows the amount of labor hours required to produce 1 pair of jeansor 1 bushel of wheat.
Country | Jeans | Wheat |
---|---|---|
(Labor hours per pair) | (Labor hours per bushel) | |
Botoga | 80 | 16 |
Fiatstan | 24 | 12 |
_____________ (Botoga/Fiatstan) has an absolute advantage in theproduction of jeans, and ___________ (Botoga/Fiatstan) has anabsolute advantage in the production of wheat.
Initially, suppose Botoga uses 54,000 hours of labor per week toproduce jeans and 18,000 hours per week to produce wheat, whileFiatstan uses 18,000 hours of labor per week to produce jeans and54,000 hours per week to produce wheat. Assume there are no othercountries willing to trade goods, so in the absence of tradebetween these two countries, each country consumes the amount ofjeans and wheat it produces.
Botoga’s opportunity cost of producing 1 pair of jeans is ______bushel of wheat, and Fiatstan’s opportunity cost of producing 1pair of jeans is _____ bushel of wheat. Therefore, __________(Botoga/Fiatstan) has a comparative advantage in the production ofjeans, and __________ (Botoga/Fiatstan) has a comparative advantagein the production of wheat.
When neither country specializes, the total production of jeansis ________ pairs per week, and the total production of wheat is_______ bushels per week.
Suppose that Botoga completely specializes in the production ofthe good in which it has a comparative advantage, producing onlythat good. It will produce _________ (Bushels or jeans). Supposealso that Fiatstan does not specialize and uses 54,000 hours oflabor to produce jeans and 18,000 hours of labor to produce wheat.It will produce _________ pairs of jeans and _________ bushels ofwheat.
Suppose Botoga and Fiatstan agree to trade with each other,exchanging 1,100 pairs of jeans for 3,300 bushels of wheat. Inparticular, Botoga will export the goods it produces, and Fiatstanwill export the goods that Botoga does not produce.
With trade, Botoga will ________ (import or export) jeans and________ (import/export) wheat. Fiatstan will _______(import/export) jeans and ______ (import/export) wheat.
When Botoga specializes and Fiatstan still produces thecombination of goods using 54,000 hours of labor to produce jeansand 18,000 hours of labor to produce wheat, the total production ofjeans becomes __________ pairs per week, and the total productionof wheat becomes __________ bushels per week.