Question 1

When some factors are fixed, it is a short­run model.
This is called ____________ model.

Accepted Answer

A) the Heckscher­Ohlin 
B) the Ricardian 
C) the specific­factors 
D) the purchasing power parity 
A) the Heckscher­Ohlin 
B) the Ricardian 
C) the specific­factors 
D) the purchasing power parity C

Question 2

Of the 10% of the U.S.work force with advanced
(Master's, other professional, and Ph.D.) degrees, the
Share of those who are foreign born is:

Accepted Answer

A) more than 50%. 
B) between 16 and 40%. 
C) less than 15%. 
D) less than 5%. 
A) more than 50%. 
B) between 16 and 40%. 
C) less than 15%. 
D) less than 5%. B

Question 3

According to the Rybczynski theorem, how will
Immigration affect the sending country's production of
Labor­intensive and capital­intensive goods?

Accepted Answer

A) Production of the labor­intensive goods will increase and production of capital­intensive goods will decrease. 
B) Production of both labor­intensive and the capital­ intensive goods will increase. 
C) Production of labor­intensive goods will decrease and production of capital­intensive goods will increase. 
D) Production of both labor­intensive and capital­ intensive goods will decrease. 
A) Production of the labor­intensive goods will increase and production of capital­intensive goods will decrease. 
B) Production of both labor­intensive and the capital­ intensive goods will increase. 
C) Production of labor­intensive goods will decrease and production of capital­intensive goods will increase. 
D) Production of both labor­intensive and capital­ intensive goods will decrease. C

Question 4

One example of emigration from Europe was during the
Period between 1870 and 1913.Wages grew rather
Than declined in the destination nations of the United
States, Canada, and Australia.Why?

Accepted Answer

A) The economic theory did not predict well. 
B) Workers from Europe were highly skilled and raised the equilibrium wage. 
C) The government stepped in and raised the minimum wage. 
D) Wages rose due to the industrial revolution and higher levels of capital but grew more slowly because of
The immigration. 
A) The economic theory did not predict well. 
B) Workers from Europe were highly skilled and raised the equilibrium wage. 
C) The government stepped in and raised the minimum wage. 
D) Wages rose due to the industrial revolution and higher levels of capital but grew more slowly because of
The immigration.

Question 5

In destination countries, as immigration occurs and
More labor is employed, in the short run, wages fall
And the rental (return to) of land and capital (fixed
Resources):

Accepted Answer

A) are unaffected. 
B) both rise. 
C) both fall. 
D) rise for one and fall for the other. 
A) are unaffected. 
B) both rise. 
C) both fall. 
D) rise for one and fall for the other.

Question 6

Interesting real­life examples tell us that labor
Migration often:

Accepted Answer

A) reduces wages in both the source nation and the destination nation. 
B) has no negative effect on wages in the destination nation. 
C) increases labor productivity. 
D) changes the labor market so that competition for workers rises. 
A) reduces wages in both the source nation and the destination nation. 
B) has no negative effect on wages in the destination nation. 
C) increases labor productivity. 
D) changes the labor market so that competition for workers rises.

Question 7

SCENARIO: TRADE IN GOODS BETWEEN CHINA
AND THE UNITED STATES
(1) China has 1,000 units of capital and 3,000
Workers; (2) the United States has 3,000 units of
Capital and 1,000 workers; (3) clothing production is
Labor intensive, and (4) chemical production is capital
Intensive.
Reference: Ref 5­1
(Scenario: Trade in Goods Between China and the
United States) Suppose that the United States
Eliminates all restrictions on immigration and Chinese
Workers are free to emigrate from China to the United
States.How many Chinese workers must emigrate
From China to the United States in order for factor
Price equalization to occur?

Accepted Answer

A) 1,000 
B) 2,000 
C) 3,000 
D) 4,000 
A) 1,000 
B) 2,000 
C) 3,000 
D) 4,000

Question 8

In the short run (specific­factors) model, what will
Happen to the rental rate on capital and the wage rate
When there is FDI in the country?

Accepted Answer

A) Both the rental rate on capital and the wage rate will increase. 
B) Both the rental rate on capital and the wage rate will decrease. 
C) The rental rate on capital will increase and the wage rate will decrease. 
D) The rental rate on capital will decrease and the wage rate will increase. 
A) Both the rental rate on capital and the wage rate will increase. 
B) Both the rental rate on capital and the wage rate will decrease. 
C) The rental rate on capital will increase and the wage rate will decrease. 
D) The rental rate on capital will decrease and the wage rate will increase.

Question 9

The combination of legal and illegal immigrants in the
United States creates a U­shaped pattern between the
Number of immigrants and:

Accepted Answer

A) wages of competing American workers. 
B) their wages. 
C) their educational level. 
D) their jobs. 
A) wages of competing American workers. 
B) their wages. 
C) their educational level. 
D) their jobs.

Question 10

U.S.immigrants from Mexico are mainly _________
Workers and U.S.immigrants from India are mainly
___________ workers.

Accepted Answer

A) low­skilled; highly skilled 
B) middle­income artisans; performance artists 
C) male; female 
D) younger; older 
A) low­skilled; highly skilled 
B) middle­income artisans; performance artists 
C) male; female 
D) younger; older

Question 11

In the long run, an increase in FDI in the
Manufacturing sector will __________ the return to
Capital in the ____________ sector(s).

Accepted Answer

A) decrease; agriculture 
B) increase; manufacturing 
C) decrease; manufacturing 
D) not change; manufacturing or agriculture 
A) decrease; agriculture 
B) increase; manufacturing 
C) decrease; manufacturing 
D) not change; manufacturing or agriculture

Question 12

In the short­run (specific factors) model, FDI will
Cause _______________ in the return to capital and
Land and _______________ in the return to labor in
The recipient country.

Accepted Answer

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

Question 13

Economists conclude that the effect on our world's
Standard of living as a result of labor and capital
Migration has been:

Accepted Answer

A) negative overall. 
B) positive overall as resources move to their highest­ valued use. 
C) positive in some respects but very harmful in the long run to workers. 
D) so small worldwide that the effect is not worth measuring. 
A) negative overall. 
B) positive overall as resources move to their highest­ valued use. 
C) positive in some respects but very harmful in the long run to workers. 
D) so small worldwide that the effect is not worth measuring.

Question 14

Consider an economy that only produces steel and
Shoes; steel is capital intensive and shoes are labor
Intensive.Which industry has a lower capital­labor
Ratio?

Accepted Answer

A) steel 
B) shoes 
C) neither steel nor shoes 
D) The capital­labor ratios are identical in steel and shoes. 
A) steel 
B) shoes 
C) neither steel nor shoes 
D) The capital­labor ratios are identical in steel and shoes.

Question 15

In the short run, which of the following will reduce the
Gains from labor migration to the recipient nation?

Accepted Answer

A) Workers remit less than the value of their marginal products. 
B) Migrant workers have a declining marginal product so that the equilibrium wage is lower than MPs of
Earlier immigrants. 
C) Immigrants are low cost in terms of adjustment costs such as crime prevention, language assimilation,
And few children enrolled in school. 
D) Workers remit more than the value of their marginal products. 
A) Workers remit less than the value of their marginal products. 
B) Migrant workers have a declining marginal product so that the equilibrium wage is lower than MPs of
Earlier immigrants. 
C) Immigrants are low cost in terms of adjustment costs such as crime prevention, language assimilation,
And few children enrolled in school. 
D) Workers remit more than the value of their marginal products.

Question 16

Consider an economy that only produces steel and
Shoes; steel is capital intensive and shoes are labor
Intensive.How will emigration of labor from this
Economy affect production?

Accepted Answer

A) Production of both the labor­intensive and the capital­intensive good will rise. 
B) Production of both the labor­intensive and capital­ intensive good will fall. 
C) Production of the labor­intensive good will rise and production of the capital­intensive good will fall. 
D) Production of the labor­intensive good will fall and production of the capital­intensive good will rise. 
A) Production of both the labor­intensive and the capital­intensive good will rise. 
B) Production of both the labor­intensive and capital­ intensive good will fall. 
C) Production of the labor­intensive good will rise and production of the capital­intensive good will fall. 
D) Production of the labor­intensive good will fall and production of the capital­intensive good will rise.

Question 17

In the United States the share of foreign­born workers
With 12 years of education or less is:

Accepted Answer

A) less than 10%. 
B) less than 50%. 
C) more than 70%. 
D) negligible. 
A) less than 10%. 
B) less than 50%. 
C) more than 70%. 
D) negligible.

Question 18

In the specific­factors model, immigration causes:

Accepted Answer

A) a rightward shift in the receiving country's production possibilities frontier. 
B) a leftward shift in the receiving country's production possibilities frontier. 
C) no change in the receiving country's production possibilities frontier. 
D) a rightward shift in the sending country's production possibilities frontier. 
A) a rightward shift in the receiving country's production possibilities frontier. 
B) a leftward shift in the receiving country's production possibilities frontier. 
C) no change in the receiving country's production possibilities frontier. 
D) a rightward shift in the sending country's production possibilities frontier.

Question 19

During the past 10 to 20 years, a considerable amount
Of foreign capital has flowed into China.What is an
Implication of capital flow on the composition of
Chinese trade?

Accepted Answer

A) There should be no change in the composition of China's trade. 
B) There should be a shift toward the export of more labor­intensive products. 
C) There should be a shift toward the export of more capital­intensive products. 
D) There should be a shift toward the import of more capital­intensive products. 
A) There should be no change in the composition of China's trade. 
B) There should be a shift toward the export of more labor­intensive products. 
C) There should be a shift toward the export of more capital­intensive products. 
D) There should be a shift toward the import of more capital­intensive products.

Question 20

In the long run, which of the following will occur if the
u.S.federal government eliminates restrictions on
Migration of Mexican workers to the United States?

Accepted Answer

A) The United States' total K/L ratio will rise. 
B) Mexico's total K/L ratio will fall. 
C) Wages of American workers who compete with Mexican workers for jobs will rise. 
D) The returns to U.S.owners of capital will remain unchanged. 
A) The United States' total K/L ratio will rise. 
B) Mexico's total K/L ratio will fall. 
C) Wages of American workers who compete with Mexican workers for jobs will rise. 
D) The returns to U.S.owners of capital will remain unchanged.

When some factors are fixed, it is a shortrun model. This is called ____________ model.

Of the 10% of the U.S.work force with advanced (Master's, other professional, and Ph.D.) degrees, the Share of those who are foreign born is:

According to the Rybczynski theorem, how will Immigration affect the sending country's production of Laborintensive and capitalintensive goods?

One example of emigration from Europe was during the Period between 1870 and 1913.Wages grew rather Than declined in the destination nations of the United States, Canada, and Australia.Why?

In destination countries, as immigration occurs and More labor is employed, in the short run, wages fall And the rental (return to) of land and capital (fixed Resources):

Interesting reallife examples tell us that labor Migration often:

In the short run (specificfactors) model, what will Happen to the rental rate on capital and the wage rate When there is FDI in the country?

The combination of legal and illegal immigrants in the United States creates a Ushaped pattern between the Number of immigrants and:

U.S.immigrants from Mexico are mainly _ Workers and U.S.immigrants from India are mainly ___ workers.

In the long run, an increase in FDI in the Manufacturing sector will the return to Capital in the __ sector(s).

In the shortrun (specific factors) model, FDI will Cause _ in the return to capital and Land and _ in the return to labor in The recipient country.

Economists conclude that the effect on our world's Standard of living as a result of labor and capital Migration has been:

Consider an economy that only produces steel and Shoes; steel is capital intensive and shoes are labor Intensive.Which industry has a lower capitallabor Ratio?

In the short run, which of the following will reduce the Gains from labor migration to the recipient nation?

Consider an economy that only produces steel and Shoes; steel is capital intensive and shoes are labor Intensive.How will emigration of labor from this Economy affect production?

In the United States the share of foreignborn workers With 12 years of education or less is:

In the specificfactors model, immigration causes:

During the past 10 to 20 years, a considerable amount Of foreign capital has flowed into China.What is an Implication of capital flow on the composition of Chinese trade?

In the long run, which of the following will occur if the u.S.federal government eliminates restrictions on Migration of Mexican workers to the United States?

The Global Economy

Trade and Technology: the Ricardian Model

Gains and Losses From Trade in the Specific-Factors Model

Trade and Resources: the Heckscher-Ohlin Model

Increasing Returns to Scale and Monopolistic Competition

Import Tariffs and Quotas Under Perfect Competition

Import Tariffs and Quotas Under Imperfect Competition

International Agreements: Trade, Labor, and the Environment

Introduction to Exchange Rates and the Foreign Exchange Market

Exchange Rates I: the Monetary Approach in the Long Run

Filters

Exam 5: Movement of Labor and Capital Between Countries

When some factors are fixed, it is a short­run model. This is called ____________ model.