To avoid trade restrictions, a U.S. firm moves its final production process to Ireland and then ships the final products to Germany. This is an example of
A) trade deflection.
B) trade diversion.
C) protectionism.
D) rules of origin.
A
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"A single-price natural monopoly that is regulated to set price equal to marginal cost incurs an economic loss." True or false? Explain
What will be an ideal response?
Firm X pays firm Y $345 for a pollution permit. This expenditure on the part of firm X is considered a __________. Firm Y ends up spending $200 to eliminate some pollution. This expenditure on the part of firm Y is considered a __________.
A. resource cost; transfer B. fixed cost; sunk cost C. market environmental cost; standards cost D. transfer; resource cost E. none of the above
Trade theory suggests that Japan would gain from a subsidy the United States provides its grain farmers if the gains to Japanese consumers of wheat products more than offsets the losses to Japanese wheat farmers. This would occur as long as Japan
A) is a net importer in bilateral trade flows with the United States. B) is a net importer of wheat. C) has a comparative advantage in wheat. D) has an absolute advantage in producing wheat. E) is involved in intra-industry trade with the United States.
What are the major reasons a multinational corporation would engage in Foreign Direct Investment (FDI)?
What will be an ideal response?