Question

6. International joint ventures Which of the following statements about joint ventures are true? Check all that apply. A joint venture may suffer from the problem of two masters." Dividing joint-venture ownership equally prevents deadlocks in decision making Joint ventures lessen the distinction between local and foreign production. A new joint venture creates welfare gains when it yields previously unattainable cost reductions.

Answer 1

1) The answer are options a, c and d. In case of joint betures, the idea of two masters might propose a problem. In the past collaborations like Maruti and Suzuki, and Hero Honda have gone through such a situation. There is always an economic gain when two companies come in joint ventures.

2) The Mexico wages are "less than" US wages after migration

3) a) False, lower wages do not provide an incentive to move to another boundary.

b) True, accoring to Neoclassical theories, the migration takes place until there is equalization of wages in two places.

c) False, the lack of labor means lesser suplly.Due to this the demand will increase, pushing the wages upwards.

d) False, It will take away the economic advantages from the people in Mexico.

e) True, with better opportunity and more efficient resources, the productivity increase.