Question 1

In the specific factors model,which of the following will increase the quantity of labor used in food production?

Accepted Answer

A) an increase in the price of food relative to that of cloth 
B) a decrease in the price of labor 
C) an equal percentage decrease in the price of food and cloth 
D) an increase in the price of cloth relative to that of food 
E) an equal percentage increase in the price of food and cloth 
A) an increase in the price of food relative to that of cloth 
B) a decrease in the price of labor 
C) an equal percentage decrease in the price of food and cloth 
D) an increase in the price of cloth relative to that of food 
E) an equal percentage increase in the price of food and cloth

Question 2

A factor of production that cannot be used outside of a particular sector of an economy is a(an)

Accepted Answer

A) specific factor. 
B) mobile factor. 
C) import- competing factor. 
D) variable factor. 
E) export- competing factor. 
A) specific factor. 
B) mobile factor. 
C) import- competing factor. 
D) variable factor. 
E) export- competing factor.

Question 3

In the four- quadrant diagram of the specific factors model,the graph in the upper right quadrant is a country's

Accepted Answer

A) labor supply curve. 
B) labor allocation constraint. 
C) production function for food. 
D) production possibility frontier. 
E) production function for cloth. 
A) labor supply curve. 
B) labor allocation constraint. 
C) production function for food. 
D) production possibility frontier. 
E) production function for cloth.

Question 4

The Ricardian two- country,two- good model predicts that there are potential benefits from trade,but NOT

Accepted Answer

A) when one country has significantly lower wages than the other country. 
B) when both countries have the same types of technology available. 
C) the mechanism that determines which country will specialize in which good. 
D) the effect of trade on income distribution. 
E) when one country has an absolute advantage in the production of both goods. 
A) when one country has significantly lower wages than the other country. 
B) when both countries have the same types of technology available. 
C) the mechanism that determines which country will specialize in which good. 
D) the effect of trade on income distribution. 
E) when one country has an absolute advantage in the production of both goods.

Question 5

A factor of production that can be used in any sector of an economy is a(an)

Accepted Answer

A) import- competing factor. 
B) variable factor. 
C) specific factor. 
D) export- competing factor. 
E) mobile factor. 
A) import- competing factor. 
B) variable factor. 
C) specific factor. 
D) export- competing factor. 
E) mobile factor.

Question 6

International trade can have important effects on the distribution of income because

Accepted Answer

A) the more powerful country dictates the terms of trade. 
B) of government corruption. 
C) different countries use different currencies. 
D) some resources are immobile in the short run. 
E) rich countries take advantage of poor countries. 
A) the more powerful country dictates the terms of trade. 
B) of government corruption. 
C) different countries use different currencies. 
D) some resources are immobile in the short run. 
E) rich countries take advantage of poor countries.

Question 7

The specific factors model was developed by

Accepted Answer

A) Richard Nixon and Robert Kennedy. 
B) Adam Smith and David Ricardo. 
C) Bill Clinton and Monica Lewinsky. 
D) 
C) B.deMille and Gordon Willis. 
E) Paul Samuelson and Ronald Jones. 
A) Richard Nixon and Robert Kennedy. 
B) Adam Smith and David Ricardo. 
C) Bill Clinton and Monica Lewinsky. 
D) 
C) B.deMille and Gordon Willis. 
E) Paul Samuelson and Ronald Jones.

Question 8

In the specific factors model,a 5% increase in the price of food accompanied by a 0% increase in the price of cloth will cause wages to _,the production of cloth to _,and the production of food to .

Accepted Answer

A) remain constant; increase; increase 
B) remain constant; decrease; decrease 
C) increase by 5%; remain unchanged; remain unchanged 
D) increase by less then 5%; decrease; increase 
E) increase by more then 5%; increase; remain unchanged 
A) remain constant; increase; increase 
B) remain constant; decrease; decrease 
C) increase by 5%; remain unchanged; remain unchanged 
D) increase by less then 5%; decrease; increase 
E) increase by more then 5%; increase; remain unchanged

Question 9

Japan's trade policies with regard to rice reflect the fact that

Accepted Answer

A) Japan has a comparative advantage in rice production and therefore exports most of its rice crop. 
B) there are gains from trade that Japan captures by engaging in free trade in rice. 
C) japanese rice farmers have significant political power. 
D) Japan imports most of the rice consumed in the country. 
E) there would be no gains from trade available to Japan if it engaged in free trade in rice. 
A) Japan has a comparative advantage in rice production and therefore exports most of its rice crop. 
B) there are gains from trade that Japan captures by engaging in free trade in rice. 
C) japanese rice farmers have significant political power. 
D) Japan imports most of the rice consumed in the country. 
E) there would be no gains from trade available to Japan if it engaged in free trade in rice.

Question 10

The specific factors model assumes that there are goods and _ factor(s)of production.

Accepted Answer

A) three; two 
B) two; three 
C) two; one 
D) two; two 
E) four; three 
A) three; two 
B) two; three 
C) two; one 
D) two; two 
E) four; three

Question 11

The slope of a country's production possibility frontier with cloth measured on the horizontal and food measured on the vertical axis in the specific factors model is equal to and it as more cloth is produced.

Accepted Answer

A) - MPLF/MPLC; becomes steeper 
B) - MPLC/MPLF; becomes steeper 
C) - MPLC/MPLF; is constant 
D) - MPLF/MPLC; becomes flatter 
E) - MPLF/MPLC; is constant 
A) - MPLF/MPLC; becomes steeper 
B) - MPLC/MPLF; becomes steeper 
C) - MPLC/MPLF; is constant 
D) - MPLF/MPLC; becomes flatter 
E) - MPLF/MPLC; is constant

Question 12

The effect of trade on income distribution

Accepted Answer

A) implies that there are no real gains from trade. 
B) is insignificant in the short run. 
C) refutes the model of comparative advantage. 
D) can be significant in the short run. 
E) is positive for all segments of an economy. 
A) implies that there are no real gains from trade. 
B) is insignificant in the short run. 
C) refutes the model of comparative advantage. 
D) can be significant in the short run. 
E) is positive for all segments of an economy.

Question 13

In the specific factors model,which of the following is treated as a specific factor?

Accepted Answer

A) food 
B) technology 
C) land 
D) cloth 
E) labor 
A) food 
B) technology 
C) land 
D) cloth 
E) labor

Question 14

When a country's labor market is in equilibrium in the specific factors model,the wage rate

Accepted Answer

A) will be higher in the sector where product price is lower. 
B) will be higher in the sector where product price is higher. 
C) will be the same in both sectors. 
D) will be higher in the export- competing sector. 
E) will be higher in the import- competing sector. 
A) will be higher in the sector where product price is lower. 
B) will be higher in the sector where product price is higher. 
C) will be the same in both sectors. 
D) will be higher in the export- competing sector. 
E) will be higher in the import- competing sector.

Question 15

In the two- country model of international labor mobility

Accepted Answer

A) the long- run equilibrium assumes that desired and actual migration are equal. 
B) the long- run equilibrium assumes that actual migration exceeds desired migration. 
C) the long- run equilibrium assumes that desired migration exceeds actual migration. 
D) the long- run equilibrium assumes countries' policies place significant restrictions on migration. 
E) the long- run equilibrium is the result of a divergence of the real wages in the two countries. 
A) the long- run equilibrium assumes that desired and actual migration are equal. 
B) the long- run equilibrium assumes that actual migration exceeds desired migration. 
C) the long- run equilibrium assumes that desired migration exceeds actual migration. 
D) the long- run equilibrium assumes countries' policies place significant restrictions on migration. 
E) the long- run equilibrium is the result of a divergence of the real wages in the two countries.

Question 16

The effect of trade on specialized employees of import- competing industries will be jobs and _ pay because they are relatively _ .

Accepted Answer

A) more; lower; immobile 
B) fewer; lower; immobile 
C) more; higher; mobile 
D) more; higher; immobile 
E) fewer; lower; mobile 
A) more; lower; immobile 
B) fewer; lower; immobile 
C) more; higher; mobile 
D) more; higher; immobile 
E) fewer; lower; mobile

Question 17

In the specific factors model,a 5% increase in the price of food accompanied by a 5% increase in the price of cloth will cause wages to _,the production of cloth to _,and the production of food to .

Accepted Answer

A) increase by less then 5%; decrease; increase 
B) remain constant; increase; increase 
C) increase by 5%; remain unchanged; remain unchanged 
D) increase by more then 5%; increase; remain unchanged 
E) remain constant; decrease; decrease 
A) increase by less then 5%; decrease; increase 
B) remain constant; increase; increase 
C) increase by 5%; remain unchanged; remain unchanged 
D) increase by more then 5%; increase; remain unchanged 
E) remain constant; decrease; decrease

Question 18

The Ricardian model of international trade demonstrates that trade can be mutually beneficial.Why,then,do governments restrict imports of some goods?

Accepted Answer

A) The Ricardian model is often incorrect in its prediction that trade can be mutually beneficial. 
B) Trade can have significant harmful effects on some segments of a country's economy. 
C) Restrictions on imports can have significant beneficial effects on domestic consumers. 
D) Import restrictions are the result of trade wars between hostile countries. 
E) Imports are only restricted when foreign- made goods do not meet domestic standards of quality. 
A) The Ricardian model is often incorrect in its prediction that trade can be mutually beneficial. 
B) Trade can have significant harmful effects on some segments of a country's economy. 
C) Restrictions on imports can have significant beneficial effects on domestic consumers. 
D) Import restrictions are the result of trade wars between hostile countries. 
E) Imports are only restricted when foreign- made goods do not meet domestic standards of quality.

Question 19

In the specific factors model,a 5% decrease in the price of food accompanied by a 5% decrease in the price of cloth will cause in the welfare of labor,in the welfare of the fixed factor in the production of food,and in the welfare of the fixed factor in the production of cloth.

Accepted Answer

A) an increase; an increase; an increase 
B) a decrease; an increase; an increase 
C) a decrease; a decrease; a decrease 
D) an increase; a decrease; a decrease 
E) no change; no change; no change 
A) an increase; an increase; an increase 
B) a decrease; an increase; an increase 
C) a decrease; a decrease; a decrease 
D) an increase; a decrease; a decrease 
E) no change; no change; no change

Question 20

In the two- country model of international labor mobility

Accepted Answer

A) migration results in increased global output,although some groups are made worse off. 
B) migration has no effect on global output,although some groups are made better off. 
C) migration results in increased global output,and all groups are made better off. 
D) migration may reduce global output,although some groups are made better off. 
E) migration has no effect on global output,although some groups are made worse off. 
A) migration results in increased global output,although some groups are made worse off. 
B) migration has no effect on global output,although some groups are made better off. 
C) migration results in increased global output,and all groups are made better off. 
D) migration may reduce global output,although some groups are made better off. 
E) migration has no effect on global output,although some groups are made worse off.

In the specific factors model,which of the following will increase the quantity of labor used in food production?

A factor of production that cannot be used outside of a particular sector of an economy is a(an)

In the four- quadrant diagram of the specific factors model,the graph in the upper right quadrant is a country's

The Ricardian two- country,two- good model predicts that there are potential benefits from trade,but NOT

A factor of production that can be used in any sector of an economy is a(an)

International trade can have important effects on the distribution of income because

The specific factors model was developed by

In the specific factors model,a 5% increase in the price of food accompanied by a 0% increase in the price of cloth will cause wages to _,the production of cloth to _,and the production of food to .

Japan's trade policies with regard to rice reflect the fact that

The specific factors model assumes that there are goods and _ factor(s)of production.

The slope of a country's production possibility frontier with cloth measured on the horizontal and food measured on the vertical axis in the specific factors model is equal to and it as more cloth is produced.

The effect of trade on income distribution

In the specific factors model,which of the following is treated as a specific factor?

When a country's labor market is in equilibrium in the specific factors model,the wage rate

In the two- country model of international labor mobility

The effect of trade on specialized employees of import- competing industries will be jobs and _ pay because they are relatively _ .

In the specific factors model,a 5% increase in the price of food accompanied by a 5% increase in the price of cloth will cause wages to _,the production of cloth to _,and the production of food to .

The Ricardian model of international trade demonstrates that trade can be mutually beneficial.Why,then,do governments restrict imports of some goods?

In the specific factors model,a 5% decrease in the price of food accompanied by a 5% decrease in the price of cloth will cause in the welfare of labor,in the welfare of the fixed factor in the production of food,and in the welfare of the fixed factor in the production of cloth.

In the two- country model of international labor mobility

Introduction

World Trade: an Overview

Labor Productivity and Comparative Advantage: the Ricardian Model

Resources and Trade: the Heckscher-Ohlin Model

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 4: Specific Factors and Income Distribution

In the specific factors model,which of the following will increase the quantity of labor used in food production?

A factor of production that cannot be used outside of a particular sector of an economy is a(an)

In the four- quadrant diagram of the specific factors model,the graph in the upper right quadrant is a country's

The Ricardian two- country,two- good model predicts that there are potential benefits from trade,but NOT

A factor of production that can be used in any sector of an economy is a(an)

International trade can have important effects on the distribution of income because

The specific factors model was developed by

In the specific factors model,a 5% increase in the price of food accompanied by a 0% increase in the price of cloth will cause wages to _,the production of cloth to _,and the production of food to .

Japan's trade policies with regard to rice reflect the fact that

The specific factors model assumes that there are goods and _ factor(s)of production.

The slope of a country's production possibility frontier with cloth measured on the horizontal and food measured on the vertical axis in the specific factors model is equal to and it as more cloth is produced.

The effect of trade on income distribution

In the specific factors model,which of the following is treated as a specific factor?

When a country's labor market is in equilibrium in the specific factors model,the wage rate

In the two- country model of international labor mobility

The effect of trade on specialized employees of import- competing industries will be jobs and _ pay because they are relatively _ .

In the specific factors model,a 5% increase in the price of food accompanied by a 5% increase in the price of cloth will cause wages to _,the production of cloth to _,and the production of food to .

The Ricardian model of international trade demonstrates that trade can be mutually beneficial.Why,then,do governments restrict imports of some goods?

In the specific factors model,a 5% decrease in the price of food accompanied by a 5% decrease in the price of cloth will cause in the welfare of labor,in the welfare of the fixed factor in the production of food,and in the welfare of the fixed factor in the production of cloth.

In the two- country model of international labor mobility

Introduction

World Trade: an Overview

Labor Productivity and Comparative Advantage: the Ricardian Model

Resources and Trade: the Heckscher-Ohlin Model

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