Question 1

Which of the following empirical studies provided the most support for the heckscher- Ohlin model?

Accepted Answer

A) the study by Bowen,Leamer,and Sveikauskas 
B) the study by Wassily Leontief 
C) the study by Davis and Weinstein 
D) the study by David Ricardo 
E) the study by Adam Smith 
A) the study by Bowen,Leamer,and Sveikauskas 
B) the study by Wassily Leontief 
C) the study by Davis and Weinstein 
D) the study by David Ricardo 
E) the study by Adam Smith

Question 2

The 1987 study by Bowen,Leamer and Sveikauskas

Accepted Answer

A) used a two- country and two- product framework. 
B) demonstrated that in fact countries tend to use different technologies. 
C) proved that the U.S.'s comparative advantage relied on skilled labor. 
D) supported the validity of the Leontief Paradox. 
E) supported the validity of the Heckscher- Ohlin model. 
A) used a two- country and two- product framework. 
B) demonstrated that in fact countries tend to use different technologies. 
C) proved that the U.S.'s comparative advantage relied on skilled labor. 
D) supported the validity of the Leontief Paradox. 
E) supported the validity of the Heckscher- Ohlin model.

Question 3

If Gambinia has many workers but very little land and even less productive capital,then,following the Heckscher- Ohlin model,we predict that Gambinia will export

Accepted Answer

A) both capital- and land- intensive goods. 
B) both labor- and land- intensive goods. 
C) labor- intensive goods. 
D) land- intensive goods. 
E) capital- intensive goods. 
A) both capital- and land- intensive goods. 
B) both labor- and land- intensive goods. 
C) labor- intensive goods. 
D) land- intensive goods. 
E) capital- intensive goods.

Question 4

According to the Heckscher- Ohlin model,the source of comparative advantage is a country's

Accepted Answer

A) technology. 
B) advertising. 
C) human capital. 
D) political system. 
E) factor endowments. 
A) technology. 
B) advertising. 
C) human capital. 
D) political system. 
E) factor endowments.

Question 5

Empirical support for the Heckscher- Ohlin model was weakest when the study applied

Accepted Answer

A) all of the assumptions of the model except those regarding shipping costs. 
B) all of the assumptions of the model except those regarding technology,shipping costs and gravity. 
C) all of the assumptions of the model except those regarding technology,goods and shipping costs. 
D) all of the assumptions of the model except that regarding technology. 
E) all of the assumptions of the model. 
A) all of the assumptions of the model except those regarding shipping costs. 
B) all of the assumptions of the model except those regarding technology,shipping costs and gravity. 
C) all of the assumptions of the model except those regarding technology,goods and shipping costs. 
D) all of the assumptions of the model except that regarding technology. 
E) all of the assumptions of the model.

Question 6

One way in which the Heckscher- Ohlin model differs from the Ricardo model of comparative advantage is by assuming that is (are)identical in all countries.

Accepted Answer

A) opportunity costs 
B) scale of production 
C) factor intensities 
D) technology 
E) factor endowments 
A) opportunity costs 
B) scale of production 
C) factor intensities 
D) technology 
E) factor endowments

Question 7

Suppose that there are two factors,capital and land,and that the United States is relatively land endowed while the European Union is relatively capital- endowed.According to the Heckscher- Ohlin model

Accepted Answer

A) the U.S.should compensate European countries once trade commences. 
B) all capitalists in both countries should support free trade. 
C) all landowners should support free trade. 
D) European landowners should support U.S.- European free trade. 
E) European capitalists should support U.S.- European free trade. 
A) the U.S.should compensate European countries once trade commences. 
B) all capitalists in both countries should support free trade. 
C) all landowners should support free trade. 
D) European landowners should support U.S.- European free trade. 
E) European capitalists should support U.S.- European free trade.

Question 8

Starting from an autarky (no- trade)situation with Heckscher- Ohlin model,if Country H is relatively labor abundant,then once trade begins

Accepted Answer

A) wages should rise and rents should fall in H. 
B) rent will be unchanged but wages will rise in H. 
C) wages and rents should rise in H. 
D) wages should fall and rents should rise in H. 
E) wages and rents should fall in H. 
A) wages should rise and rents should fall in H. 
B) rent will be unchanged but wages will rise in H. 
C) wages and rents should rise in H. 
D) wages should fall and rents should rise in H. 
E) wages and rents should fall in H.

Question 9

Which of the following is an assertion of the Heckscher- Ohlin model?

Accepted Answer

A) The wage- rental ratio is determined by relative product prices. 
B) Factor price equalization will occur only if there is costless mobility of all factors across borders. 
C) Factor endowments determine the technology that is available to a country,which determines the good in which the country will have a comparative advantage. 
D) In the long run,labor is mobile and capital is not. 
E) An increase in a country's labor supply will increase production of both the capital- intensive and the labor- intensive good. 
A) The wage- rental ratio is determined by relative product prices. 
B) Factor price equalization will occur only if there is costless mobility of all factors across borders. 
C) Factor endowments determine the technology that is available to a country,which determines the good in which the country will have a comparative advantage. 
D) In the long run,labor is mobile and capital is not. 
E) An increase in a country's labor supply will increase production of both the capital- intensive and the labor- intensive good.

Question 10

The Leontief Paradox

Accepted Answer

A) refers to the fact that Leontief-an American economist-had a Russian name. 
B) still accurately applies to today's pattern of U.S.international trade. 
C) refers to the finding that U.S.Exports were more capital intensive than its exports. 
D) refers to the finding that the U.S.produces outside its Edgeworth Box. 
E) refers to the finding that U.S.exports were more labor intensive than its imports. 
A) refers to the fact that Leontief-an American economist-had a Russian name. 
B) still accurately applies to today's pattern of U.S.international trade. 
C) refers to the finding that U.S.Exports were more capital intensive than its exports. 
D) refers to the finding that the U.S.produces outside its Edgeworth Box. 
E) refers to the finding that U.S.exports were more labor intensive than its imports.

Question 11

If Australia has relatively more land per worker,and Belgium has relatively more capital per worker,then if trade began between these two countries

Accepted Answer

A) the relative price of the capital- intensive product would decrease in Belgium. 
B) the relative price of the land- intensive product would increase in Belgium. 
C) the relative price of the capital- intensive product would increase in Australia. 
D) the relative price of the land- intensive product would increase in Australia. 
E) relative product prices would diverge between Australia and Belgium. 
A) the relative price of the capital- intensive product would decrease in Belgium. 
B) the relative price of the land- intensive product would increase in Belgium. 
C) the relative price of the capital- intensive product would increase in Australia. 
D) the relative price of the land- intensive product would increase in Australia. 
E) relative product prices would diverge between Australia and Belgium.

Question 12

Which of the following is an assertion of the Heckscher- Ohlin model?

Accepted Answer

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) In the long run,labor is mobile and capital is not. 
C) Factor endowments determine the technology that is available to a country,which determines the good in which the country will have a comparative advantage. 
D) Factor price equalization will occur only if there is costless mobility of all factors across borders. 
E) An increase in a country's labor supply will increase production of both the capital- intensive and the labor- intensive good. 
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) In the long run,labor is mobile and capital is not. 
C) Factor endowments determine the technology that is available to a country,which determines the good in which the country will have a comparative advantage. 
D) Factor price equalization will occur only if there is costless mobility of all factors across borders. 
E) An increase in a country's labor supply will increase production of both the capital- intensive and the labor- intensive good.

Question 13

In the 2- factor,2- good Heckscher- Ohlin model,the production possibility frontier is kinked when

Accepted Answer

A) there is no factor substitution in production. 
B) transportation costs are very high. 
C) the opportunity cost of production is constant. 
D) there are unemployed factor resources. 
E) a country does not engage in trade. 
A) there is no factor substitution in production. 
B) transportation costs are very high. 
C) the opportunity cost of production is constant. 
D) there are unemployed factor resources. 
E) a country does not engage in trade.

Question 14

If Japan is relatively capital rich and the United States is relatively land rich,and if food is relatively land intensive then trade between these two,formerly autarkic countries will result in

Accepted Answer

A) an increase in the relative price of food in the U.S. 
B) an increase in the relative price of food in both countries. 
C) a decrease in the relative price of food in both countries. 
D) an increase in the relative price of food in Japan. 
E) a global increase in the relative price of food. 
A) an increase in the relative price of food in the U.S. 
B) an increase in the relative price of food in both countries. 
C) a decrease in the relative price of food in both countries. 
D) an increase in the relative price of food in Japan. 
E) a global increase in the relative price of food.

Question 15

International trade has strong effects on income distributions.Therefore,international trade

Accepted Answer

A) will tend to hurt some groups in each trading country. 
B) will tend to hurt everyone in both countries. 
C) will tend to hurt one trading country. 
D) is beneficial to everyone in both trading countries. 
E) will be beneficial to all those engaged in international trade. 
A) will tend to hurt some groups in each trading country. 
B) will tend to hurt everyone in both countries. 
C) will tend to hurt one trading country. 
D) is beneficial to everyone in both trading countries. 
E) will be beneficial to all those engaged in international trade.

Question 16

In the 2- factor,2- good Heckscher- Ohlin model,an influx of workers from across the border would

Accepted Answer

A) shift the production possibility curve outward and decrease the production of the capital- intensive product. 
B) shift the production possibility curve outward and decrease the production of the labor- intensive product. 
C) shift the production possibility curve outward,and increase the production of both goods. 
D) move the point of production along the production possibility curve. 
E) shift the possibility curve outward and displace preexisting labor. 
A) shift the production possibility curve outward and decrease the production of the capital- intensive product. 
B) shift the production possibility curve outward and decrease the production of the labor- intensive product. 
C) shift the production possibility curve outward,and increase the production of both goods. 
D) move the point of production along the production possibility curve. 
E) shift the possibility curve outward and displace preexisting labor.

Question 17

Which of the following is an assertion of the Heckscher- Ohlin model?

Accepted Answer

A) The wage- rental ratio determines the capital- labor ratio in a country's industries. 
B) In the long run,labor is mobile and capital is not. 
C) Factor price equalization will occur only if there is costless mobility of all factors across borders. 
D) Factor endowments determine the technology that is available to a country,which determines the good in which the country will have a comparative advantage. 
E) An increase in a country's labor supply will increase production of both the capital- intensive and the labor- intensive good. 
A) The wage- rental ratio determines the capital- labor ratio in a country's industries. 
B) In the long run,labor is mobile and capital is not. 
C) Factor price equalization will occur only if there is costless mobility of all factors across borders. 
D) Factor endowments determine the technology that is available to a country,which determines the good in which the country will have a comparative advantage. 
E) An increase in a country's labor supply will increase production of both the capital- intensive and the labor- intensive good.

Question 18

The Heckscher- Ohlin model predicts all of the following EXCEPT

Accepted Answer

A) which country will export which product. 
B) that trade increases a country's overall welfare. 
C) that relative wages will tend to become equal in both trading countries. 
D) which factor of production within each country will gain from trade. 
E) the volume of trade. 
A) which country will export which product. 
B) that trade increases a country's overall welfare. 
C) that relative wages will tend to become equal in both trading countries. 
D) which factor of production within each country will gain from trade. 
E) the volume of trade.

Which of the following empirical studies provided the most support for the heckscher- Ohlin model?

The 1987 study by Bowen,Leamer and Sveikauskas

If Gambinia has many workers but very little land and even less productive capital,then,following the Heckscher- Ohlin model,we predict that Gambinia will export

According to the Heckscher- Ohlin model,the source of comparative advantage is a country's

Empirical support for the Heckscher- Ohlin model was weakest when the study applied

One way in which the Heckscher- Ohlin model differs from the Ricardo model of comparative advantage is by assuming that is (are)identical in all countries.

Suppose that there are two factors,capital and land,and that the United States is relatively land endowed while the European Union is relatively capital- endowed.According to the Heckscher- Ohlin model

Starting from an autarky (no- trade)situation with Heckscher- Ohlin model,if Country H is relatively labor abundant,then once trade begins

Which of the following is an assertion of the Heckscher- Ohlin model?

The Leontief Paradox

If Australia has relatively more land per worker,and Belgium has relatively more capital per worker,then if trade began between these two countries

Which of the following is an assertion of the Heckscher- Ohlin model?

In the 2- factor,2- good Heckscher- Ohlin model,the production possibility frontier is kinked when

If Japan is relatively capital rich and the United States is relatively land rich,and if food is relatively land intensive then trade between these two,formerly autarkic countries will result in

International trade has strong effects on income distributions.Therefore,international trade

In the 2- factor,2- good Heckscher- Ohlin model,an influx of workers from across the border would

Which of the following is an assertion of the Heckscher- Ohlin model?

The Heckscher- Ohlin model predicts all of the following EXCEPT

Introduction

World Trade: an Overview

Labor Productivity and Comparative Advantage: the Ricardian Model

Specific Factors and Income Distribution

The Standard Trade Model

External Economies of Scale and the International Location of Production

Firms in the Global Economy: Export Decisions,outsourcing,and Multinational Enterprises

The Instruments of Trade Policy

The Political Economy of Trade Policy

Trade Policy in Developing Countries

Controversies in Trade Policy

Filters

Exam 5: Resources and Trade: the Heckscher-Ohlin Model

Which of the following empirical studies provided the most support for the heckscher- Ohlin model?

The 1987 study by Bowen,Leamer and Sveikauskas

If Gambinia has many workers but very little land and even less productive capital,then,following the Heckscher- Ohlin model,we predict that Gambinia will export

According to the Heckscher- Ohlin model,the source of comparative advantage is a country's

Empirical support for the Heckscher- Ohlin model was weakest when the study applied

One way in which the Heckscher- Ohlin model differs from the Ricardo model of comparative advantage is by assuming that is (are)identical in all countries.

Suppose that there are two factors,capital and land,and that the United States is relatively land endowed while the European Union is relatively capital- endowed.According to the Heckscher- Ohlin model

Starting from an autarky (no- trade)situation with Heckscher- Ohlin model,if Country H is relatively labor abundant,then once trade begins

Which of the following is an assertion of the Heckscher- Ohlin model?

The Leontief Paradox

If Australia has relatively more land per worker,and Belgium has relatively more capital per worker,then if trade began between these two countries

Which of the following is an assertion of the Heckscher- Ohlin model?

In the 2- factor,2- good Heckscher- Ohlin model,the production possibility frontier is kinked when

If Japan is relatively capital rich and the United States is relatively land rich,and if food is relatively land intensive then trade between these two,formerly autarkic countries will result in

International trade has strong effects on income distributions.Therefore,international trade

In the 2- factor,2- good Heckscher- Ohlin model,an influx of workers from across the border would

Which of the following is an assertion of the Heckscher- Ohlin model?

The Heckscher- Ohlin model predicts all of the following EXCEPT

Introduction

World Trade: an Overview

Labor Productivity and Comparative Advantage: the Ricardian Model

Specific Factors and Income Distribution

The Standard Trade Model

External Economies of Scale and the International Location of Production

Firms in the Global Economy: Export Decisions,outsourcing,and Multinational Enterprises

The Instruments of Trade Policy

The Political Economy of Trade Policy

Trade Policy in Developing Countries

Controversies in Trade Policy

Filters