A) the relative price of the capital intensive product will fall to some point between the pretrade relative prices.
B) demand will shift away from the capital-intensive product,and its production will decrease.
C) demand will shift away from the capital-intensive product,and its production will decrease relative to that of the land intensive product.
D) the production of the capital-intensive product will decrease,but by less than production of the land-intensive product.
E) the country that exports the capital-intensive good will lose its comparative advantage.
Correct Answer
verified
Correct Answer
verified
Correct Answer
verified
The H.O.model explores the nature and the limitations of assuming that the sole determinant of comparative advantage is inter-country differences in (relative)factor proportions.
Correct Answer
verified
A) factor endowments.
B) technology.
C) advertising.
D) human capital.
E) political system.
Correct Answer
verified
Correct Answer
verified
Correct Answer
verified
In a two good,two factor model,such as t...View Answer
Correct Answer
verified
View Answer
Correct Answer
verified
Trefler demonstrated that the actual vol...View Answer
Correct Answer
verified
View Answer
Correct Answer
verified
The pattern of trade is generally observ...View Answer
Correct Answer
verified
View Answer
A) the relative prices of traded goods in the two countries converge.
B) relative factor prices in the two countries diverge.
C) benefits from trade are evenly distributed between the two countries.
D) all factors in both countries will gain from trade.
E) all factors in one country will gain,but there may be no gains in the other country.
Correct Answer
verified
A
Correct Answer
verified
A) will tend to hurt some groups in each trading country.
B) is beneficial to everyone in both trading countries.
C) will tend to hurt one trading country.
D) will tend to hurt everyone in both countries.
E) will be beneficial to all those engaged in international trade.
Correct Answer
verified
Correct Answer
verified
A) tastes and preferences.
B) military capabilities.
C) the size of their economies.
D) relative abundance of factors of production.
E) labor productivities.
Correct Answer
verified
Correct Answer
verified
A) in the short run.
B) in countries lacking comparative advantage.
C) in capital-intensive industries.
D) in labor-intensive industries.
E) in countries lacking fair labor laws.
Correct Answer
verified
Correct Answer
verified
A) using relatively more labor than goods that are not labor intensive.
B) using labor as the only input.
C) using more labor per unit of output than goods that are not labor intensive.
D) using labor such that the total cost of labor is greater than the total cost of capital.
E) using labor such that the cost of labor is more than 50% of total cost.
Correct Answer
verified
Correct Answer
verified
A) The wage-rental ratio determines the capital-labor ratio in a country's industries.
B) An increase in a country's labor supply will increase production of both the capital-intensive and the labor-intensive good.
C) In the long-run,labor is mobile and capital is not.
D) Factor price equalization will occur only if there is costless mobility of all factors across borders.
E) Factor endowments determine the technology that is available to a country,which determines the good in which the country will have a comparative advantage.
Correct Answer
verified
Correct Answer
verified
Correct Answer
verified
The terms of trade would settle somewher...View Answer
Correct Answer
verified
View Answer
A) the volume of trade.
B) which country will export which product.
C) which factor of production within each country will gain from trade.
D) that relative wages will tend to become equal in both trading countries.
E) that trade increases a country's overall welfare.
Correct Answer
verified
Correct Answer
verified
A) has only two countries.
B) has only two products.
C) has two factors of production.
D) has two production possibility frontiers (one for each country) .
E) has varying wage rates.
Correct Answer
verified
Correct Answer
verified
A) The wage-rental ratio is determined by relative product prices.
B) An increase in a country's labor supply will increase production of both the capital-intensive and the labor-intensive good.
C) In the long-run,labor is mobile and capital is not.
D) Factor price equalization will occur only if there is costless mobility of all factors across borders.
E) Factor endowments determine the technology that is available to a country,which determines the good in which the country will have a comparative advantage.
Correct Answer
verified
Correct Answer
verified
A) the relative price of the capital intensive good in the capital rich country will be the same as that in the capital poor country.
B) the capital rich country will charge less for the capital intensive good than the price paid by the capital poor country for the capital-intensive good.
C) the capital rich country will charge more for the capital intensive good than the price paid by the capital poor country for the capital-intensive good.
D) workers in the capital rich country will earn more than those in the poor country.
E) the workers in the capital rich country will earn less than those in the poor country.
Correct Answer
verified
Correct Answer
verified
A) An increase in a country's labor supply will increase production of the labor-intensive good and decrease production of the capital-intensive good.
B) An increase in a country's labor supply will increase production of both the capital-intensive and the labor-intensive good.
C) In the long-run,labor is mobile and capital is not.
D) Factor price equalization will occur only if there is costless mobility of all factors across borders.
E) Factor endowments determine the technology that is available to a country,which determines the good in which the country will have a comparative advantage.
Correct Answer
verified
A
Correct Answer
verified
A) the real income of both countries may increase.
B) the real income of Australia and of Belgium will increase.
C) the real income of Australia but not of Belgium will increase.
D) the real income of neither country will increase.
E) the real income of both countries will increase.
Correct Answer
verified
Correct Answer
verified
A) factor endowments.
B) tastes and preferences.
C) available technologies.
D) factor productivities.
E) physical size.
Correct Answer
verified
Correct Answer
verified
Showing 1 - 20 of 66
Related Exams