Question ECN 160A International Microeconomics Midterm Exam

ECN 160A International Microeconomics
Midterm Exam
Winter 2014

I. Multiple Choice (5pts each)
Please write the appropriate answer to each question on a scantron form.

1. What country was the world’s largest exporter of goods in 2009?
A) China
B) Germany
C) the United States
D) Japan
E) None of the above

2. “Vertical FDI” refers to
A) direct investment between industrialized countries.
B) direct investment for the purpose of avoiding trade barriers.
C) direct investment for the purpose of locating production in low-wage countries.
D) direct investment undertaken in order to draw on indigenous technical expertise.
E) none of the above.

3. Analysis of wages and output in Miami following the Mariel boatlift in 1980
A) supports the Rybczinski Theorem.
B) supports the Stolper-Samuelson Theorem.
C) supports the Heckscher-Ohlin Theorem.
D) shows that immigration has little effect on labor markets.
E) none of the above.

4. Most migration takes place
A) with people moving from poor to rich countries.
B) with people moving between rich countries.
C) with people moving from rich to poor countries.
D) with people moving between poor countries.
E) None of the above.

5. In 1950, Raúl Prebisch and Hans Singer hypothesized that the price of primary commodities would
A) increase over time.
B) increase relative to manufactured goods due to growing scarcity.
C) decrease over time.
D) decrease relative to manufactured goods.
E) be more volatile than the price of manufactured goods.

6. Diminishing marginal returns to capital means that:
A) the marginal product of labor declines as the amount of labor used in a sector increases.
B) the marginal product of capital declines as the amount of capital used in a sector increases.
C) the marginal product of capital declines as the amount of labor in a sector increases.
D) the marginal product of labor declines when the amount of capital combined with labor in a sector increases.
E) none of the above.

7. In the specific factors model, real wages
A) increase in terms of the import good.
B) increase in terms of the export good.
C) stay exactly the same.
D) unambiguously increase.
E) none of the above.

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