A laboratory is weighing whether to buy or lease a new chemistry analyzer. Which of the following is an advantage specific to purchasing the instrument?

A reference laboratory prices a send-out assay at $55 per test; the variable cost to run it is $22 per test. How much does each test contribute toward fixed costs and profit? Formula: Contribution Margin per Test = Selling Price per Test – Variable Cost per Test.

A laboratory director wants to confirm that the totals on the balance sheet remain in balance after a transaction. Which relationship must always hold true?

A laboratory’s fixed costs for a new send-out test are $105,000 per year. The test reimburses at $60 and has a variable cost of $25 per test. How many tests must the lab perform annually to break even? Formula: Break-even Volume = Fixed Costs / (Revenue per Test – Variable Cost per Test).

Which of the following is not one of the three conditions in the OLI Paradigm?  1. Ownership2. Location3. Internalization4. Inflation

New Trade Theory is especially useful for explaining industries where firms gain advantage from:  1. perfect competition2. economies of scale and first-mover benefits3. agricultural land endowments4. currency pegs

Note: Answer this question at the end of the exam.  It is an extra credit question (2 Points). What grade do you think you made on this exam?  How did you prepare for the exam and did you spend enough time on the content?  Do you think you need to make changes to prepare for the Unit 2 Exams, and if so, what changes do you intend to make?

Monopolistic Advantage Theory suggests that a firm will invest abroad successfully when it has: 1. lower wages than every local competitor2. a specific advantage such as technology, brand, or superior management3. no transportation costs4. a government-owned parent company

Multiple Choice: In the lecture’s adaptation of Porter’s framework, what is added as a sixth force?  1. Exchange rates2. Culture3. Government policy4. Labor mobility

Explain the difference between absolute advantage and comparative advantage. Why can trade still be beneficial even when one country is less efficient at producing every good?  Please write 2-4 sentences.