Q1: Multiple Choice Questions:
1. Severe imperfections in the labor market arise from immobility of workers due to immigration barriers. As a response, firms should consider
a) Moving to the workers.
b) Moving to countries where labor services are the lowest in absolute terms.
c) Moving to countries where labor services are underpriced relative to productivity.
d) Hiring illegal immigrants.
2. Japan plays a major role as an exporter of FDI. As a recipient of FDI,
A. Japan receives as much FDI as it exports, making it a major player on both fronts.
B. Japan plays a relatively minor role, reflecting a variety of legal, economic, and cultural barriers to FDI.
C. Japan's receipts of FDI are third in the world.
D. None of the above
3. MNCs might have been lured to invest in China not only by lower labor and material costs but also
A. by China's lower labor and material costs.
B. by the desire to preempt the entry of rivals into China's potentially huge market.
C. by the tasty Kung Pao chicken.
D. by the desire to see, if not buy, all the tea in China.
4. Trade barriers can arise naturally. Which of the following are natural barriers to trade?
A. Transportation costs
D. Transactions costs
5. Severe imperfections in the labor market lead to persistent wage differentials among countries. Some explanations include
A. because workers are not allowed to freely move across national boundaries to seek higher wages.
B. because workers may choose to not move across national boundaries to seek higher wages due to the cultural differences.
C. but these differences are offset by low productivity in low labor cost countries.
D. both a) and b)
6. Also, MNCs often find it profitable to locate manufacturing/processing facilities near
A. the home office to exploit their assets in place.
B. the natural resources in order to save transportation costs.