Question 1

The H-O model is a general equilibrium model because it deals with:

Accepted Answer

A) production in both nations 
B) consumption in both nations 
C) trade between the two nations 
D) all of the above 
A) production in both nations 
B) consumption in both nations 
C) trade between the two nations 
D) all of the above D

Question 2

In the H-O model,international trade is based mostly on a difference in:

Accepted Answer

A) technology 
B) factor endowments 
C) economies of scale 
D) tastes 
A) technology 
B) factor endowments 
C) economies of scale 
D) tastes B

Question 3

A difference in relative commodity prices between nations can be based on a difference in:

Accepted Answer

A) technology 
B) factor endowments 
C) tastes 
D) all of the above 
A) technology 
B) factor endowments 
C) tastes 
D) all of the above D

Question 4

The H-O model is a simplification of the a truly general equilibrium model because it deals with:

Accepted Answer

A) two nations 
B) two commodities 
C) two factors of production 
D) all of the above 
A) two nations 
B) two commodities 
C) two factors of production 
D) all of the above

Question 5

According to the H-O model,trade reduces international differences in:

Accepted Answer

A) relative but not absolute factor prices 
B) absolute but not relative factor prices 
C) both relative and absolute factor prices 
D) neither relative nor absolute factor prices 
A) relative but not absolute factor prices 
B) absolute but not relative factor prices 
C) both relative and absolute factor prices 
D) neither relative nor absolute factor prices

Question 6

When w/r falls,L/K

Accepted Answer

A) falls in the production of both commodities 
B) rises in the production of both commodities 
C) can rise or fall 
D) is not affected 
A) falls in the production of both commodities 
B) rises in the production of both commodities 
C) can rise or fall 
D) is not affected

Question 7

A nation is said to have a relative abundance of K if it has a:

Accepted Answer

A) greater absolute amount of K 
B) smaller absolute amount of L 
C) higher L/K ratio 
D) lower r/w 
A) greater absolute amount of K 
B) smaller absolute amount of L 
C) higher L/K ratio 
D) lower r/w

Question 8

We say that commodity Y is K-intensive with respect to X when:

Accepted Answer

A) more K is used in the production of Y than X 
B) less L is used in the production of Y than X 
C) a lower L/K ratio is used in the production of Y than X 
D) a higher K/L is used in the production of X than Y 
A) more K is used in the production of Y than X 
B) less L is used in the production of Y than X 
C) a lower L/K ratio is used in the production of Y than X 
D) a higher K/L is used in the production of X than Y

Question 9

The Leontief paradox refers to the empirical finding that U.S.

Accepted Answer

A) import substitutes are more K-intensive than exports 
B) imports are more K-intensive than exports 
C) exports are more L-intensive than imports 
D) exports are more K-intensive than import substitutes 
A) import substitutes are more K-intensive than exports 
B) imports are more K-intensive than exports 
C) exports are more L-intensive than imports 
D) exports are more K-intensive than import substitutes

Question 10

For factor reversal to occur,two commodities must be produced with:

Accepted Answer

A) sufficiently different elasticity of substitution of factors 
B) the same K/L ratio 
C) technologically-fixed factor proportions 
D) equal elasticity of substitution of factors 
A) sufficiently different elasticity of substitution of factors 
B) the same K/L ratio 
C) technologically-fixed factor proportions 
D) equal elasticity of substitution of factors

Question 11

Which is not an assumption of the H-O model

Accepted Answer

A) the same technology in both nations 
B) constant returns to scale 
C) complete specialization 
D) equal tastes in both nations 
A) the same technology in both nations 
B) constant returns to scale 
C) complete specialization 
D) equal tastes in both nations

Question 12

With equal technology nations will have equal K/L in production if:

Accepted Answer

A) factor prices are the same 
B) tastes are the same 
C) production functions are the same 
D) all of the above 
A) factor prices are the same 
B) tastes are the same 
C) production functions are the same 
D) all of the above

Question 13

The H-O model extends the classical trade model by:

Accepted Answer

A) explaining the basis for comparative advantage 
B) examining the effect of trade on factor prices 
C) both a and b 
D) neither a nor b 
A) explaining the basis for comparative advantage 
B) examining the effect of trade on factor prices 
C) both a and b 
D) neither a nor b

Question 14

From empirical studies,we conclude that the H-O theory:

Accepted Answer

A) must be rejected 
B) must be accepted without reservations 
C) can be accepted while awaiting further testing 
D) explains all international trade 
A) must be rejected 
B) must be accepted without reservations 
C) can be accepted while awaiting further testing 
D) explains all international trade

Question 15

According to the H-O model,international trade will:

Accepted Answer

A) reduce international differences in per capita incomes 
B) increases international differences in per capita incomes 
C) may increase or reduce international differences in per capita incomes 
D) lead to complete specialization 
A) reduce international differences in per capita incomes 
B) increases international differences in per capita incomes 
C) may increase or reduce international differences in per capita incomes 
D) lead to complete specialization

The H-O model is a general equilibrium model because it deals with:

In the H-O model,international trade is based mostly on a difference in:

A difference in relative commodity prices between nations can be based on a difference in:

The H-O model is a simplification of the a truly general equilibrium model because it deals with:

According to the H-O model,trade reduces international differences in:

When w/r falls,L/K

A nation is said to have a relative abundance of K if it has a:

We say that commodity Y is K-intensive with respect to X when:

The Leontief paradox refers to the empirical finding that U.S.

For factor reversal to occur,two commodities must be produced with:

Which is not an assumption of the H-O model

With equal technology nations will have equal K/L in production if:

The H-O model extends the classical trade model by:

From empirical studies,we conclude that the H-O theory:

According to the H-O model,international trade will:

Introduction

The Law of Comparative Advantage

The Standard Theory of International Trade

Demand and Supply, Offer Curves, and the Terms of Trade

Economies of Scale, Imperfect Competition, and International Trade

Economic Growth and International Trade

Trade Restrictions: Tariffs

Nontariff Trade Barriers and the New Protectionism

Economic Integration: Customs Unions and Free Trade Areas

International Trade and Economic Development

International Resource Movements and Multinational Corporations

Balance of Payments

Foreign Exchange Markets and Exchange Rates

Exchange Rate Determination

The Price Adjustment Mechanism With Flexible and Fixed Exchange Rates

The Income Adjustment Mechanism and Synthesis of Automatic Adjustments

Open-Economy Macroeconomics: Adjustment Policies

Prices and Output in an Open Economy: Aggregate Demand and Aggregate Supply

Flexible Versus Fixed Exchange Rates, the European Monetary System, and Macroeconomic Policy Coordination

The International Monetary System: Past, Present, and Future

Filters

Exam 5: Factor Endowments and the Heckscherohlin Theory

The H-O model is a general equilibrium model because it deals with:

In the H-O model,international trade is based mostly on a difference in:

A difference in relative commodity prices between nations can be based on a difference in:

The H-O model is a simplification of the a truly general equilibrium model because it deals with:

According to the H-O model,trade reduces international differences in:

When w/r falls,L/K

A nation is said to have a relative abundance of K if it has a:

We say that commodity Y is K-intensive with respect to X when:

The Leontief paradox refers to the empirical finding that U.S.

For factor reversal to occur,two commodities must be produced with:

Which is not an assumption of the H-O model

With equal technology nations will have equal K/L in production if:

The H-O model extends the classical trade model by:

From empirical studies,we conclude that the H-O theory:

According to the H-O model,international trade will:

Introduction

The Law of Comparative Advantage

The Standard Theory of International Trade

Demand and Supply, Offer Curves, and the Terms of Trade

Economies of Scale, Imperfect Competition, and International Trade

Economic Growth and International Trade

Trade Restrictions: Tariffs

Nontariff Trade Barriers and the New Protectionism

Economic Integration: Customs Unions and Free Trade Areas

International Trade and Economic Development

International Resource Movements and Multinational Corporations

Balance of Payments

Foreign Exchange Markets and Exchange Rates

Exchange Rate Determination

The Price Adjustment Mechanism With Flexible and Fixed Exchange Rates

The Income Adjustment Mechanism and Synthesis of Automatic Adjustments

Open-Economy Macroeconomics: Adjustment Policies

Prices and Output in an Open Economy: Aggregate Demand and Aggregate Supply

Flexible Versus Fixed Exchange Rates, the European Monetary System, and Macroeconomic Policy Coordination

The International Monetary System: Past, Present, and Future

Filters