9) The Leontief paradox a. Was applied to the product life cycle theory b. Suggested that the U.S. exports labor-intensive goods c. Found that national income differences underlie world trade patterns d. Implied that diseconomies of scale occur at low output levels

QUESTION 9 Global trade leads to: ⒸA. New industries. B. Declining industries. C. New technologies. O D. All of the above.

( ) 1. The lowering of trade and investment barriers: A. protects domestic industries from foreign competition. B. was not an agenda of the Uruguay Round. allows firms to base production at optimal locations outside their home country. C. D. creates an unfavorable environment for FDI. () 2. Which of the following is an advantage of choosing exporting as a mode of entry into foreign markets? A. A firm can avoid the cost of establishing manufacturing operations in the host country. B. A firm shares the development costs and risks with its host partner. C. A firm can earn returns from process technology skills countries where FDI is restricted. D. A firm has access to local partner's knowledge. ( )3. n which of the following modes of entry into foreign markets does a firm agree to set up an operating plant for a foreign client and hand over the plant when it is fully operational? Franchising agreement. B. Turnkey A. project C. Licensing agreement D. Wholly owned subsidiary ( )4. Which of…

1. Explain how the Ricardian model and the Heckscher - Ohlin model of international trade differ in terms of the following. Use suitable diagrams to illustrate. a) Production possibility frontiers b) Relative supply curves c) Effects of trade on relative prices, production, and income distribution