Exam 3: Sources of Comparative Advantage

Explain how immigration and trade may worsen wage inequality, and how college education may mitigate against that.

Assume that the United States is relatively scarce in labor and relatively abundant in capital.According to the Heckscher-Ohlin theory, which of the following will occur in the United States in the presence of trade?

External economies of scale can occur when

Empirical testing by Wassily Leontief gave support to the Heckscher-Ohlin theory of trade.

Regarding governmental subsidies applied to commercial jetliners, the World Trade Organization ruled that during 2010-2012

The simultaneous import and export of computers by Germany is an example of

External economies of scale exist when an industry's outputs increase and

Stringent governmental regulations (e.g., air quality standards) imposed on domestic steel manufacturers tend to

In his test of the Heckscher-Ohlin model, W.Leontief found that, although the United States was perceived as being capital abundant relative to the rest of the world, U.S.exports were less capital intensive than import-competing goods.

Ricardo's theory of comparative advantage is a static theory that does not consider changes in international competitiveness over the long run.

Intra-industry trade would occur if computers manufactured in the United States by IBM were exported to Japan while the United States imported computers manufactured by Hitachi of Japan.

Chinese manufacturers face rising wages because of

Eli Heckscher and Bertil Ohlin are associated with the theory of comparative advantage that stresses differences in

The Heckscher-Ohlin theory contends that over a period of years, a country that initially is an exporter of a product will become an importer of that product.

In the United States, most low-skilled manufacturing jobs have been lost due to

Proponents of ____ maintain that government should enact policies that encourage the development of emerging "sunrise" industries.

Explain how the Airbus-Boeing subsidies are justified by both firms.

Figure 1. An Example of China-U.S. Trade Possibilities -Considering Figure 1, what are the terms of trade represented?

By widening the size of the domestic market, international trade permits companies to take advantage of longer production runs and increasing efficiencies such as mass production.

The increased use of robots, combined with rising labor costs in China, has led some U.S.businesses to return to manufacturing in the United States.