Many U.S. economists are opposed to restrictions on trade because:

1. use of restrictions leads other countries to increase imports from the U.S.
2. free trade discourages international competition
3. national security is compromised when high technology products are imported
4. they lower total output from a global perspective

Which of the following is a characteristic of virtual companies in the biotechnology sector:

1. they need major capital investments in order to have low levels of financial risk
2. they rely on research and production flexibility for their competitive advantages
3. they are successful when there are slow rates of technological change and innovation
4. they hire large numbers of employees in order to conduct experiments and manage computer systems

When an entrepreneur decides to form a virtual company, we are likely to observe that:

1. He spends a lot of money on physical capital
2. A primary input is intellectual capital
3. Most activities are carried out on an in-house basis
4. The company will have high fixed costs

The best example of an inherent comparative advantage for a nation is:

1. the development of high technology medical industry
2. installation of new computer systems in the financial industry
3. ownership of a large stock of oil and natural gas reserves
4. improvements in the skills of manufacturing workers

The U.S. may experience the loss of comparative advantage for manufactured goods because:

1. English is no longer the international language of business
2. many U.S. products have a transferable comparative advantage
3. the U.S. lacks a modern technology infrastructure
4. compared to other nations, the U.S. government and its institutions are unstab