Question 1

Which of the following countries had the MOST R&D
Scientists in 2010?

Accepted Answer

A) the United States 
B) China 
C) Japan 
D) India 
A) the United States 
B) China 
C) Japan 
D) India

Question 2

Suppose that Home has 20% of the world's capital, 10% of
the world's skilled labor, 30% of the world's unskilled
labor, and produces 20% of the world's GDP.What does
this information suggest about Home's resource
endowments? Explain your answer.

Accepted Answer

It suggests that Home is abundant in uns

Question 3

Who is likely to lose if the United States imposed
restrictions on its imports from China?

Accepted Answer

Losers include: consumers of Chinese­mad

Question 4

The Heckscher­Ohlin model offers an explanation of:

Accepted Answer

A) only the gains from international trade. 
B) only the pattern of international trade. 
C) only the effects of international trade on returns to mobile resources. 
D) gains from international trade, the pattern of international trade,and the effects of international trade on
Returns to mobile resources. 
A) only the gains from international trade. 
B) only the pattern of international trade. 
C) only the effects of international trade on returns to mobile resources. 
D) gains from international trade, the pattern of international trade,and the effects of international trade on
Returns to mobile resources.

Question 5

Compared with the rest of the world in 2010, the United
States is LEAST abundant in:

Accepted Answer

A) capital. 
B) skilled labor. 
C) unskilled labor. 
D) illiterate labor. 
A) capital. 
B) skilled labor. 
C) unskilled labor. 
D) illiterate labor.

Question 6

Consider the Heckscher­Ohlin theory and the Stolper­
Samuelson theorem.What do they suggest about what are
the gainers and the losers from International trade?

Accepted Answer

The HO theory suggests that the import­c

Question 7

The Leontief paradox found that:

Accepted Answer

A) exports should always be capital intensive. 
B) imports should always be labor intensive. 
C) U.S.exports were labor intensive. 
D) U.S.exports were capital intensive. 
A) exports should always be capital intensive. 
B) imports should always be labor intensive. 
C) U.S.exports were labor intensive. 
D) U.S.exports were capital intensive.

Question 8

LCD TVs are capital intensive, and tennis rackets are labor
Intensive.Suppose Canada has $100 billion of capital and 2
Million workers and Mexico has $10 billion of capital and 20
Million workers.According to the HO model:

Accepted Answer

A) Canada will specialize in and export LCD TVs. 
B) Mexico will specialize in and export LCD TVs. 
C) Canada will specialize in and export tennis rackets. 
D) Mexico will import tennis rackets. 
A) Canada will specialize in and export LCD TVs. 
B) Mexico will specialize in and export LCD TVs. 
C) Canada will specialize in and export tennis rackets. 
D) Mexico will import tennis rackets.

Question 9

The conclusion that international trade will lead to an
Increase in real earnings of a country's abundant resource
Is known as:

Accepted Answer

A) factor­intensity reversal. 
B) the Heckscher­Ohlin model. 
C) Riparian comparative advantage. 
D) the Stolper­Samuelson theorem. 
A) factor­intensity reversal. 
B) the Heckscher­Ohlin model. 
C) Riparian comparative advantage. 
D) the Stolper­Samuelson theorem.

Question 10

(Figure: A Country's Before and After Trade Equilibria) If
The new international relative price of computers increases
From its pre­trade position, how will the slope of the price
Line change in the graph?

Accepted Answer

A) The slope will increase. 
B) The slope will decrease. 
C) The slope will not change but the price line will shift to the right. 
D) The slope will not change but the price line will shift to the left. 
A) The slope will increase. 
B) The slope will decrease. 
C) The slope will not change but the price line will shift to the right. 
D) The slope will not change but the price line will shift to the left.

Question 11

Which of the following statements is NOT an explanation of
Leontief's paradox?

Accepted Answer

A) Leontief ignored the fact that the United States imports a variety of products rather than just one. 
B) He ignored the fact that U.S.labor is highly skilled. 
C) He ignored the importance of land as a factor in many U.S.exports. 
D) Trade patterns in 1947 might have been affected by the fact that World War II had ended only two years earlier. 
A) Leontief ignored the fact that the United States imports a variety of products rather than just one. 
B) He ignored the fact that U.S.labor is highly skilled. 
C) He ignored the importance of land as a factor in many U.S.exports. 
D) Trade patterns in 1947 might have been affected by the fact that World War II had ended only two years earlier.

Question 12

The Heckscher­Ohlin model assumes that production
Techniques within a nation use the factors of production:

Accepted Answer

A) at different intensities depending on changing technology and which nation you are discussing. 
B) at different intensities for each industry, so that one is more or less intensive in that factor than the other. 
C) at the same intensity for each industry-for example, the ratio of capital to labor is the same for every industry in
The nation. 
D) in no definite pattern. 
A) at different intensities depending on changing technology and which nation you are discussing. 
B) at different intensities for each industry, so that one is more or less intensive in that factor than the other. 
C) at the same intensity for each industry-for example, the ratio of capital to labor is the same for every industry in
The nation. 
D) in no definite pattern.

Question 13

Why is the specific­factors model referred to as a "short­
run" version of the Heckscher­Ohlin model?

Accepted Answer

If no factors are specific, then the pre

Question 14

(Table: Factor Use in Trade) In the hypothetical economy
Provided in the table, what is the capital­to­labor ratio for
Exports?

Accepted Answer

A) $1,849 
B) $35,500 
C) $18,490 
D) $1,920 
A) $1,849 
B) $35,500 
C) $18,490 
D) $1,920

Question 15

If there are only two nations, one nation's exports are the
Other's imports; which of the following is identical for both
Nations?

Accepted Answer

A) only the equilibrium relative price of the first nation's exports 
B) only the opportunity cost of the first nation's exports 
C) neither the equilibrium relative price nor the opportunity cost of the first nation's exports 
D) both the equilibrium relative price and the opportunity cost of the first nation's exports 
A) only the equilibrium relative price of the first nation's exports 
B) only the opportunity cost of the first nation's exports 
C) neither the equilibrium relative price nor the opportunity cost of the first nation's exports 
D) both the equilibrium relative price and the opportunity cost of the first nation's exports

Question 16

What does the HO model predict will happen to the real
Returns to factors of production after trade occurs?

Accepted Answer

A) Labor and capital must be used together in production, and there is no room for competition for remuneration. 
B) Capital owners always get the "gains from trade." 
C) Resources used intensively in export industries (such as labor in China and capital in the United States) will see an
Increase in their returns, whereas the resources used
Intensively in import­competing industries will see a
Decline in their return. 
D) Poor nations will always get the least returns to their factors of production. 
A) Labor and capital must be used together in production, and there is no room for competition for remuneration. 
B) Capital owners always get the "gains from trade." 
C) Resources used intensively in export industries (such as labor in China and capital in the United States) will see an
Increase in their returns, whereas the resources used
Intensively in import­competing industries will see a
Decline in their return. 
D) Poor nations will always get the least returns to their factors of production.

Question 17

According to the application in the text, why can Nike shoes
Be produced at low cost in foreign countries?

Accepted Answer

A) Foreign countries have superior technology. 
B) Foreign countries are strategic allies for the home country. 
C) Labor costs in foreign countries are lower than in the United States. 
D) Nike has no competition in the foreign country. 
A) Foreign countries have superior technology. 
B) Foreign countries are strategic allies for the home country. 
C) Labor costs in foreign countries are lower than in the United States. 
D) Nike has no competition in the foreign country.

Question 18

(Figure: Home and Foreign Autarky Equilibria) If shoes are a
Labor­intensive industry, which nation has more labor
Resources relative to its capital resources?

Accepted Answer

A) Home 
B) Foreign 
C) neither Home nor Foreign 
D) There is not enough information to answer this question. 
A) Home 
B) Foreign 
C) neither Home nor Foreign 
D) There is not enough information to answer this question.

Question 19

In the text, which of the following statements is NOT an
Assumption of the Heckscher­Ohlin model?

Accepted Answer

A) There are two countries, each of which produces two goods using labor and capital. 
B) Labor and capital can move freely between the production of two goods. 
C) There is free trade between the countries. 
D) Labor and capital can move freely between the two countries. 
A) There are two countries, each of which produces two goods using labor and capital. 
B) Labor and capital can move freely between the production of two goods. 
C) There is free trade between the countries. 
D) Labor and capital can move freely between the two countries.

Question 20

In a labor­abundant nation, will workers be more or less
favorable to international trade? What about a capital­
abundant nation? Why?

Accepted Answer

Workers will be more favorable to trade

Which of the following countries had the MOST R&D Scientists in 2010?

Suppose that Home has 20% of the world's capital, 10% of the world's skilled labor, 30% of the world's unskilled labor, and produces 20% of the world's GDP.What does this information suggest about Home's resource endowments? Explain your answer.

Who is likely to lose if the United States imposed restrictions on its imports from China?

The HeckscherOhlin model offers an explanation of:

Compared with the rest of the world in 2010, the United States is LEAST abundant in:

Consider the HeckscherOhlin theory and the Stolper Samuelson theorem.What do they suggest about what are the gainers and the losers from International trade?

The Leontief paradox found that:

LCD TVs are capital intensive, and tennis rackets are labor Intensive.Suppose Canada has $100 billion of capital and 2 Million workers and Mexico has $10 billion of capital and 20 Million workers.According to the HO model:

The conclusion that international trade will lead to an Increase in real earnings of a country's abundant resource Is known as:

(Figure: A Country's Before and After Trade Equilibria) If The new international relative price of computers increases From its pretrade position, how will the slope of the price Line change in the graph?

Which of the following statements is NOT an explanation of Leontief's paradox?

The HeckscherOhlin model assumes that production Techniques within a nation use the factors of production:

Why is the specificfactors model referred to as a "short run" version of the HeckscherOhlin model?

(Table: Factor Use in Trade) In the hypothetical economy Provided in the table, what is the capitaltolabor ratio for Exports?

If there are only two nations, one nation's exports are the Other's imports; which of the following is identical for both Nations?

What does the HO model predict will happen to the real Returns to factors of production after trade occurs?

According to the application in the text, why can Nike shoes Be produced at low cost in foreign countries?

(Figure: Home and Foreign Autarky Equilibria) If shoes are a Laborintensive industry, which nation has more labor Resources relative to its capital resources?

In the text, which of the following statements is NOT an Assumption of the HeckscherOhlin model?

In a laborabundant nation, will workers be more or less favorable to international trade? What about a capital abundant nation? Why?

The Global Economy

Trade and Technology: the Ricardian Model

Gains and Losses From Trade in the Specific-Factors Model

Movement of Labor and Capital Between Countries

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 4: Trade and Resources: the Heckscher-Ohlin Model

Which of the following countries had the MOST R&D Scientists in 2010?

Suppose that Home has 20% of the world's capital, 10% of the world's skilled labor, 30% of the world's unskilled labor, and produces 20% of the world's GDP.What does this information suggest about Home's resource endowments? Explain your answer.

Who is likely to lose if the United States imposed restrictions on its imports from China?

The Heckscher­Ohlin model offers an explanation of:

Compared with the rest of the world in 2010, the United States is LEAST abundant in:

Consider the Heckscher­Ohlin theory and the Stolper­ Samuelson theorem.What do they suggest about what are the gainers and the losers from International trade?

The Leontief paradox found that:

LCD TVs are capital intensive, and tennis rackets are labor Intensive.Suppose Canada has $100 billion of capital and 2 Million workers and Mexico has $10 billion of capital and 20 Million workers.According to the HO model:

The conclusion that international trade will lead to an Increase in real earnings of a country's abundant resource Is known as:

(Figure: A Country's Before and After Trade Equilibria) If The new international relative price of computers increases From its pre­trade position, how will the slope of the price Line change in the graph?

Which of the following statements is NOT an explanation of Leontief's paradox?

The Heckscher­Ohlin model assumes that production Techniques within a nation use the factors of production:

Why is the specific­factors model referred to as a "short­ run" version of the Heckscher­Ohlin model?

(Table: Factor Use in Trade) In the hypothetical economy Provided in the table, what is the capital­to­labor ratio for Exports?

If there are only two nations, one nation's exports are the Other's imports; which of the following is identical for both Nations?

What does the HO model predict will happen to the real Returns to factors of production after trade occurs?

According to the application in the text, why can Nike shoes Be produced at low cost in foreign countries?

(Figure: Home and Foreign Autarky Equilibria) If shoes are a Labor­intensive industry, which nation has more labor Resources relative to its capital resources?

In the text, which of the following statements is NOT an Assumption of the Heckscher­Ohlin model?

In a labor­abundant nation, will workers be more or less favorable to international trade? What about a capital­ abundant nation? Why?

The Global Economy

Trade and Technology: the Ricardian Model

Gains and Losses From Trade in the Specific-Factors Model

Movement of Labor and Capital Between Countries

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

The HeckscherOhlin model offers an explanation of:

Consider the HeckscherOhlin theory and the Stolper Samuelson theorem.What do they suggest about what are the gainers and the losers from International trade?

(Figure: A Country's Before and After Trade Equilibria) If The new international relative price of computers increases From its pretrade position, how will the slope of the price Line change in the graph?

The HeckscherOhlin model assumes that production Techniques within a nation use the factors of production:

Why is the specificfactors model referred to as a "short run" version of the HeckscherOhlin model?

(Table: Factor Use in Trade) In the hypothetical economy Provided in the table, what is the capitaltolabor ratio for Exports?

(Figure: Home and Foreign Autarky Equilibria) If shoes are a Laborintensive industry, which nation has more labor Resources relative to its capital resources?

In the text, which of the following statements is NOT an Assumption of the HeckscherOhlin model?

In a laborabundant nation, will workers be more or less favorable to international trade? What about a capital abundant nation? Why?