Question 1

Linder's hypothesis provides an explanation for

Accepted Answer

A)  increasing returns to scale. 
B)  imperfect competition. 
C)  intraindustry trade. 
D)  All of the above. 
A)  increasing returns to scale. 
B)  imperfect competition. 
C)  intraindustry trade. 
D)  All of the above.

Question 2

In his tests, Leontief used an input-output table to

Accepted Answer

A)  calculate the capital and labor required to produce $1 million of U.S. exports and imports. 
B)  calculate the labor productivity of American workers relative to foreign workers. 
C)  calculate the capital productivity of American capital relative to foreign capital. 
D)  All of the above. 
A)  calculate the capital and labor required to produce $1 million of U.S. exports and imports. 
B)  calculate the labor productivity of American workers relative to foreign workers. 
C)  calculate the capital productivity of American capital relative to foreign capital. 
D)  All of the above.

Question 3

A possible reconciliation of the Leontief Paradox is that the United States has high tariffs on capital intensive goods and low tariffs on labor intensive goods.

Accepted Answer

A) True 
 B)False

Question 4

According to the product life cycle model, comparative advantage

Accepted Answer

A)  may move from one country to another as a product matures. 
B)  always stays in the country where a product is invented. 
C)  in agricultural or homogeneous manufactured goods is determined by the stage of the life cycle these products are in. 
D)  Both A and C. 
A)  may move from one country to another as a product matures. 
B)  always stays in the country where a product is invented. 
C)  in agricultural or homogeneous manufactured goods is determined by the stage of the life cycle these products are in. 
D)  Both A and C.

Question 5

If output more than doubles when all inputs are doubled, production is said to occur under conditions of

Accepted Answer

A)  increasing returns to scale. 
B)  imperfect competition. 
C)  intraindustry trade. 
D)  interindustry trade. 
A)  increasing returns to scale. 
B)  imperfect competition. 
C)  intraindustry trade. 
D)  interindustry trade.

Question 6

MacDougall showed in his tests that

Accepted Answer

A)  relatively higher U.S. labor productivity was associated with relatively higher U.K. export ratios. 
B)  relatively higher U.K. labor productivity was associated with relatively higher U.K. export ratios. 
C)  labor productivity ratios and export ratios were not associated with each other. 
D)  None of the above. 
A)  relatively higher U.S. labor productivity was associated with relatively higher U.K. export ratios. 
B)  relatively higher U.K. labor productivity was associated with relatively higher U.K. export ratios. 
C)  labor productivity ratios and export ratios were not associated with each other. 
D)  None of the above.

Question 7

Compare and contrast the predictions of the Heckscher-Ohlin and classical models about likely trading partners of various countries with the predictions of the Linder hypothesis.

Accepted Answer

Both the classical and the HO models arg

Question 8

Intraindustry trade can be explained in part by

Accepted Answer

A)  transportation costs within and between countries. 
B)  problems of data aggregation and categorization. 
C)  increasing returns to scale. 
D)  All of the above. 
A)  transportation costs within and between countries. 
B)  problems of data aggregation and categorization. 
C)  increasing returns to scale. 
D)  All of the above.

Question 9

Describe some of the problems in testing the Heckscher-Ohlin theory.

Accepted Answer

Leontief's test was incomplete because h

Question 10

Leontief's results were considered paradoxical because the United States was believed to be

Accepted Answer

A)  technologically efficient relative to the rest of the world. 
B)  capital abundant relative to the rest of the world. 
C)  labor abundant relative to the rest of the world. 
D)  All of the above. 
A)  technologically efficient relative to the rest of the world. 
B)  capital abundant relative to the rest of the world. 
C)  labor abundant relative to the rest of the world. 
D)  All of the above.

Question 11

Leontief's results can be interpreted as

Accepted Answer

A)  evidence against the classical model. 
B)  evidence against the Heckscher-Ohlin model. 
C)  support for the classical model. 
D)  support for the Heckscher-Ohlin model. 
A)  evidence against the classical model. 
B)  evidence against the Heckscher-Ohlin model. 
C)  support for the classical model. 
D)  support for the Heckscher-Ohlin model.

Question 12

Leontief reconciled his results by arguing that

Accepted Answer

A)  American labor is more efficient than foreign. 
B)  American capital is more efficient than foreign. 
C)  Foreign capital is more efficient than American. 
D)  Foreign labor is more efficient than American. 
A)  American labor is more efficient than foreign. 
B)  American capital is more efficient than foreign. 
C)  Foreign capital is more efficient than American. 
D)  Foreign labor is more efficient than American.

Question 13

The simultaneous export and import of airplanes by the United States is an example of

Accepted Answer

A)  increasing returns to scale. 
B)  imperfect competition. 
C)  intraindustry trade. 
D)  interindustry trade. 
A)  increasing returns to scale. 
B)  imperfect competition. 
C)  intraindustry trade. 
D)  interindustry trade.

Question 14

If one allows natural resources to be a factor of production, then it is possible to explain the Leontief Paradox for the United States on the grounds that U.S. imports are natural resource intensive.

Accepted Answer

A) True 
 B)False

Question 15

Most theories of comparative advantage explain trade patterns due to international differences in

Accepted Answer

A)  demand conditions. 
B)  supply conditions. 
C)  demand and supply conditions. 
D)  tariffs. 
A)  demand conditions. 
B)  supply conditions. 
C)  demand and supply conditions. 
D)  tariffs.

Question 16

Which of the following is not one of the theories that have emerged as alternatives to the HO model?

Accepted Answer

A)  The human skills theory. 
B)  The product life cycle theory. 
C)  The similarity of preferences theory. 
D)  All of the above have been suggested as alternatives to the HO model. 
A)  The human skills theory. 
B)  The product life cycle theory. 
C)  The similarity of preferences theory. 
D)  All of the above have been suggested as alternatives to the HO model.

Question 17

Leontief showed that U.S. exports were capital intensive relative to U.S. imports.

Accepted Answer

A) True 
 B)False

Question 18

The product life cycle model says that comparative advantage in manufactured goods may move from one country to another as a product becomes more standardized.

Accepted Answer

A) True 
 B)False

Question 19

Leontief used an input-output table in order to test the

Accepted Answer

A)  classical theory. 
B)  the Heckscher-Ohlin theory. 
C)  the Linder hypothesis. 
D)  All of the above. 
A)  classical theory. 
B)  the Heckscher-Ohlin theory. 
C)  the Linder hypothesis. 
D)  All of the above.

Question 20

An input-output table

Accepted Answer

A)  details the flows of goods and services between various sectors of the economy. 
B)  shows purchases by certain industries from other industries. 
C)  shows sales by certain industries to other industries. 
D)  All of the above. 
A)  details the flows of goods and services between various sectors of the economy. 
B)  shows purchases by certain industries from other industries. 
C)  shows sales by certain industries to other industries. 
D)  All of the above.

Exam 5: Tests of Trade Models: the Leontief Paradox and Its After-math

Linder's hypothesis provides an explanation for

In his tests, Leontief used an input-output table to

A possible reconciliation of the Leontief Paradox is that the United States has high tariffs on capital intensive goods and low tariffs on labor intensive goods.

According to the product life cycle model, comparative advantage

If output more than doubles when all inputs are doubled, production is said to occur under conditions of

MacDougall showed in his tests that

Compare and contrast the predictions of the Heckscher-Ohlin and classical models about likely trading partners of various countries with the predictions of the Linder hypothesis.

Intraindustry trade can be explained in part by

Describe some of the problems in testing the Heckscher-Ohlin theory.

Leontief's results were considered paradoxical because the United States was believed to be

Leontief's results can be interpreted as

Leontief reconciled his results by arguing that

The simultaneous export and import of airplanes by the United States is an example of

If one allows natural resources to be a factor of production, then it is possible to explain the Leontief Paradox for the United States on the grounds that U.S. imports are natural resource intensive.

Most theories of comparative advantage explain trade patterns due to international differences in

Which of the following is not one of the theories that have emerged as alternatives to the HO model?

Leontief showed that U.S. exports were capital intensive relative to U.S. imports.

The product life cycle model says that comparative advantage in manufactured goods may move from one country to another as a product becomes more standardized.

Leontief used an input-output table in order to test the

An input-output table

An Introduction to International Trade

Tools of Analysis for International Trade Models

The Classical Model of International Trade

The Heckscher-Ohlin Theory

Tariffs

Nontariff Barriers and Arguments for Protection

Commercial Policy: History and Practice

Preferential Trade Arrangements

International Trade and Economic Growth

An Introduction to International Finance

The Balance of Payments

The Foreign-Exchange Market

Prices and Exchange Rates: Purchasing Power Parity

Exchange Rates, Interest Rates, and Interest Parity

Foreign-Exchange Risk, Forecasting, and International Investment

Basic Theories of the Balance of Payments

Exchange Rate Theories

Alternative International Monetary Standards

International Banking, Debt, and Risk

Open-Economy Macroeconomic Policy and Adjustment

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