Exam 3: Sources of Comparative Advantage

The factor endowment theory states that comparative advantage is explained

According to the Heckscher-Ohlin Theory,______ constitutes the major source of comparative advantage

Assume that the United States is scarce in labor and abundant in capital.According to the Heckscher-Ohlin theory,which of the following would occur for the United States once trade opens

In industries where the final product is much less weighty or bulky than the materials from which it is made,firms tend to locate production near resource supplies.

The Leontief Paradox suggested that,in contrast to the predictions of the factor-endowment theory,U.S.exports were less capital-intensive than U.S.import-competing goods.

In terms of the factor-endowment model of Heckscher and Ohlin

Both the Ricardo model of comparative advantage and the Heckscher-Ohlin theory assert that trade patterns are largely the result of differences in endowments of factors of production.

Which trade theory suggests that a newly produced good,once exported,could ultimately end up being imported as the technology is transferred to lower- cost nations?

Assume that Country A,in the absence of trade,finds itself relatively abundant in labor and relatively scarce in land.The factor endowment theory reasons that with free trade,the internal distribution of national income in Country A will change in favor of:

Regarding governmental subsidies applied to commercial jetliners,during 2010-2011 the World Trade Organization ruled that

According to the factor-endowment theory,a nation will import that good for which a large amount of the relatively abundant resource is used.

Recent studies of U.S.resource endowments indicate that the United States is most abundant in unskilled labor,followed by semi-skilled labor and skilled labor.

According to Staffan Linder,the factor endowment theory is useful in explaining trade patterns in manufactured goods,but not primary products.

The Heckscher-Ohlin theory rules out the basis for trade of the David Ricardo model by assuming that ______ is (are) the same for all countries.

Industrial processes that add weight or bulk to a commodity are likely to be located near the resource market to minimize transportation costs.

Does factor price equalization occur in the real world?

Which trade theory suggests that comparative advantage tends to shift from one nation to another as a product matures?

The factor-endowment theory asserts that with specialization and trade there tends to occur an equalization in the relative resource prices of trading partners.

Figure 3.1China - US Trade Possibilities -Considering Figure 3.1,what are the terms of trade represented?

From 2000-2010,which nation lost thousands of jobs to China,whose average wages were half of those of this country?