Question 1

United States' agricultural production is ________ in
Comparison with Chinese agricultural production.

Accepted Answer

A) capital intensive 
B) labor intensive 
C) less subsidized 
D) more restrictive 
A) capital intensive 
B) labor intensive 
C) less subsidized 
D) more restrictive

Question 2

SCENARIO: FRANCE AND ITALY
(1) France and Italy only trade with each other; (2) each
Produces wine and bread; (3) The production of bread is
Relatively capital intensive, and the production of wine is
Relatively labor intensive, and (4) France is relatively
Abundant in capital, while Italy is relatively abundant in
Labor.
Reference: Ref 4­6
(Scenario: France and Italy) According to the HO model,
What product(s) will Italy export?

Accepted Answer

A) bread 
B) wine 
C) neither bread nor wine 
D) both bread and wine 
A) bread 
B) wine 
C) neither bread nor wine 
D) both bread and wine

Question 3

(Figure: Home and Foreign Autarky Equilibria) Which line in
The graph represents the Home relative price of computers in
Terms of shoes?

Accepted Answer

A) A 
B) B 
C) C 
D) U 
A) A 
B) B 
C) C 
D) U

Question 4

In the long run, when factors are mobile, an increase in
The relative price of a good will increase the real earnings
Of the factor used intensively in the production of that
Good.This is known as:

Accepted Answer

A) the Heckscher­Ohlin model. 
B) the Stolper­Samuelson theorem. 
C) the Riparian model. 
D) the specific­factor theorem. 
A) the Heckscher­Ohlin model. 
B) the Stolper­Samuelson theorem. 
C) the Riparian model. 
D) the specific­factor theorem.

Question 5

A situation in which one nation produces good A using labor
More intensively (relative to capital) than good B and a
Second nation, producing good A, uses capital more
Intensively (relative to labor) than good B is called:

Accepted Answer

A) a reversal of factor intensities. 
B) a paradox of factor intensities 
C) backward technology. 
D) micro intensity. 
A) a reversal of factor intensities. 
B) a paradox of factor intensities 
C) backward technology. 
D) micro intensity.

Question 6

Figure: A Country's Before and After Trade Equilibria   (Figure: A Country's Before and After Trade Equilibria) What
Are the post­trade quantities of shoes and computers
Produced by this nation?

Accepted Answer

A) 300 shoes; 300 computers 
B) 225 shoes; 175 computers 
C) 225 shoes; 200 computers 
D) 150 shoes; 300 computers 
A) 300 shoes; 300 computers 
B) 225 shoes; 175 computers 
C) 225 shoes; 200 computers 
D) 150 shoes; 300 computers

Question 7

(Figure: Home and Foreign Autarky Equilibria) Which line in
The graph represents Foreign's relative price of computers in
Terms of shoes?

Accepted Answer

A) A* 
B) B* 
C) C* 
D) U* 
A) A* 
B) B* 
C) C* 
D) U*

Question 8

The Heckscher­Ohlin model assumes that technology in
Each industry:

Accepted Answer

A) Is the same in each nation-each firm has access to the most profitable technology. 
B) has increasing returns so that one nation will be able to gain a comparative advantage by developing new
Technology. 
C) is very different across the world-some nations have access to technology, whereas others do not. 
D) is hard to access because R&D is very expensive especially for low­income nations. 
A) Is the same in each nation-each firm has access to the most profitable technology. 
B) has increasing returns so that one nation will be able to gain a comparative advantage by developing new
Technology. 
C) is very different across the world-some nations have access to technology, whereas others do not. 
D) is hard to access because R&D is very expensive especially for low­income nations.

Question 9

(Table: Capital Intensity Across Industries) According to the
Table, which industry is the MOST labor intensive?

Accepted Answer

A) Apparel and other textile products 
B) Lumber and wood products 
C) Primary metal industries 
D) Chemicals and allied products 
A) Apparel and other textile products 
B) Lumber and wood products 
C) Primary metal industries 
D) Chemicals and allied products

Question 10

According to the text, identical technologies are a more
Reasonable assumption for:

Accepted Answer

A) the shoe industry. 
B) the call center industry. 
C) neither the shoe nor call center industry. 
D) both the shoe and call center industries. 
A) the shoe industry. 
B) the call center industry. 
C) neither the shoe nor call center industry. 
D) both the shoe and call center industries.

Question 11

Figure: A Country's Before and After Trade Equilibria   (Figure: A Country's Before and After Trade Equilibria) What
Are the pretrade quantities of shoes and computers
Produced by this nation?

Accepted Answer

A) 300 shoes; 300 computers 
B) 225 shoes; 175 computers 
C) 225 shoes; 200 computers 
D) 150 shoes; 300 computers 
A) 300 shoes; 300 computers 
B) 225 shoes; 175 computers 
C) 225 shoes; 200 computers 
D) 150 shoes; 300 computers

Question 12

To determine whether a nation has an "abundance" of a
Resource, economists look at:

Accepted Answer

A) the exports of the nation. 
B) the imports of the nation. 
C) the total quantity of that resource compared with the total quantity of the other resource. 
D) a nation's share of the resource compared with its share of world GDP. 
A) the exports of the nation. 
B) the imports of the nation. 
C) the total quantity of that resource compared with the total quantity of the other resource. 
D) a nation's share of the resource compared with its share of world GDP.

Question 13

Figure: A Country's Before and After Trade Equilibria   (Figure: A Country's Before and After Trade Equilibria)
Suppose that the new international relative price of
Computers increases from the pretrade price.If we then
Subtract the number of shoes produced domestically at the
New international price from the number of shoes consumed
At this price, we will get one point on ____________ for
Shoes.

Accepted Answer

A) the import demand schedule 
B) the export supply schedule 
C) the production possibilities frontier 
D) the indifference curve 
A) the import demand schedule 
B) the export supply schedule 
C) the production possibilities frontier 
D) the indifference curve

Question 14

Suppose that Home is a capital­abundant country.When
Home trades with Foreign, a labor­abundant country, the
HO model predicts that the price of:

Accepted Answer

A) the labor­intensive good will rise in Home. 
B) the labor­intensive good will rise in Foreign. 
C) the capital­intensive good will rise in Foreign. 
D) the capital­intensive good will fall in Home. 
A) the labor­intensive good will rise in Home. 
B) the labor­intensive good will rise in Foreign. 
C) the capital­intensive good will rise in Foreign. 
D) the capital­intensive good will fall in Home.

Question 15

SCENARIO: CHILE AND THE UNITED STATES
Chile and the United States use capital and labor to
Produce wheat and automobiles.The United States is
Capital abundant, and Chile is labor abundant.Wheat
Production is more labor intensive than automobile
Production.
Reference: Ref 4­8
(Scenario: Chile and the United States) According to the
Heckscher­Ohlin model:

Accepted Answer

A) Chilean workers should support U.S.­Chile free trade. 
B) Chilean owners of capital should support U.S.­Chile free trade. 
C) U.S.owners of capital should oppose U.S.­Chile free trade. 
D) both U.S.and Chilean owners of capital should oppose U.S.­Chile free trade. 
A) Chilean workers should support U.S.­Chile free trade. 
B) Chilean owners of capital should support U.S.­Chile free trade. 
C) U.S.owners of capital should oppose U.S.­Chile free trade. 
D) both U.S.and Chilean owners of capital should oppose U.S.­Chile free trade.

Question 16

The Heckscher­Ohlin model assumes that the factors of
Production are mobile ______, but immobile _____.

Accepted Answer

A) in the short run; in the long run 
B) in the long run; in the short run 
C) domestically; internationally 
D) internationally; domestically 
A) in the short run; in the long run 
B) in the long run; in the short run 
C) domestically; internationally 
D) internationally; domestically

Question 17

The Leontief paradox questioned the validity of:

Accepted Answer

A) the comparative advantage model. 
B) the Heckscher­Ohlin model. 
C) the Riparian model. 
D) the specific­factors model. 
A) the comparative advantage model. 
B) the Heckscher­Ohlin model. 
C) the Riparian model. 
D) the specific­factors model.

Question 18

After accounting for differing _________ as well as
_________, evidence for many countries is broadly
Consistent with the Heckscher­Ohlin model.

Accepted Answer

A) factor productivities; factor endowments 
B) preferences; factor productivities 
C) preferences; factor endowments 
D) factor endowments; generalities 
A) factor productivities; factor endowments 
B) preferences; factor productivities 
C) preferences; factor endowments 
D) factor endowments; generalities

Question 19

In a capital­abundant country, free trade will cause a(n)
__________ in the rental of capital and a(n)
____________ in the marginal product of capital.

Accepted Answer

A) increase; increase 
B) increase; decrease 
C) decrease; decrease 
D) decrease; increase 
A) increase; increase 
B) increase; decrease 
C) decrease; decrease 
D) decrease; increase

Question 20

SCENARIO: FRANCE AND ITALY
(1) France and Italy only trade with each other; (2) each
Produces wine and bread; (3) The production of bread is
Relatively capital intensive, and the production of wine is
Relatively labor intensive, and (4) France is relatively
Abundant in capital, while Italy is relatively abundant in
Labor.
Reference: Ref 4­6
(Scenario: France and Italy) According to the HO model,
Free trade between Italy and France should cause:

Accepted Answer

A) a decrease in the French price of wine and a decrease in the Italian price of wine. 
B) increases in the price of wine in Italy and in France. 
C) an increase in the French price of wine and an increase in the Italian price of bread. 
D) a decrease in the Italian price of bread and a decrease in the French price of wine. 
A) a decrease in the French price of wine and a decrease in the Italian price of wine. 
B) increases in the price of wine in Italy and in France. 
C) an increase in the French price of wine and an increase in the Italian price of bread. 
D) a decrease in the Italian price of bread and a decrease in the French price of wine.

United States' agricultural production is ________ in Comparison with Chinese agricultural production.

(Figure: Home and Foreign Autarky Equilibria) Which line in The graph represents the Home relative price of computers in Terms of shoes?

In the long run, when factors are mobile, an increase in The relative price of a good will increase the real earnings Of the factor used intensively in the production of that Good.This is known as:

A situation in which one nation produces good A using labor More intensively (relative to capital) than good B and a Second nation, producing good A, uses capital more Intensively (relative to labor) than good B is called:

Figure: A Country's Before and After Trade Equilibria (Figure: A Country's Before and After Trade Equilibria) What Are the posttrade quantities of shoes and computers Produced by this nation?

(Figure: Home and Foreign Autarky Equilibria) Which line in The graph represents Foreign's relative price of computers in Terms of shoes?

The HeckscherOhlin model assumes that technology in Each industry:

(Table: Capital Intensity Across Industries) According to the Table, which industry is the MOST labor intensive?

According to the text, identical technologies are a more Reasonable assumption for:

Figure: A Country's Before and After Trade Equilibria (Figure: A Country's Before and After Trade Equilibria) What Are the pretrade quantities of shoes and computers Produced by this nation?

To determine whether a nation has an "abundance" of a Resource, economists look at:

Suppose that Home is a capitalabundant country.When Home trades with Foreign, a laborabundant country, the HO model predicts that the price of:

The HeckscherOhlin model assumes that the factors of Production are mobile __, but immobile _.

The Leontief paradox questioned the validity of:

After accounting for differing _ as well as _, evidence for many countries is broadly Consistent with the HeckscherOhlin model.

In a capitalabundant country, free trade will cause a(n) in the rental of capital and a(n) __ in the marginal product of capital.

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

United States' agricultural production is ________ in Comparison with Chinese agricultural production.

(Figure: Home and Foreign Autarky Equilibria) Which line in The graph represents the Home relative price of computers in Terms of shoes?

In the long run, when factors are mobile, an increase in The relative price of a good will increase the real earnings Of the factor used intensively in the production of that Good.This is known as:

A situation in which one nation produces good A using labor More intensively (relative to capital) than good B and a Second nation, producing good A, uses capital more Intensively (relative to labor) than good B is called:

Figure: A Country's Before and After Trade Equilibria (Figure: A Country's Before and After Trade Equilibria) What Are the post­trade quantities of shoes and computers Produced by this nation?

(Figure: Home and Foreign Autarky Equilibria) Which line in The graph represents Foreign's relative price of computers in Terms of shoes?

The Heckscher­Ohlin model assumes that technology in Each industry:

(Table: Capital Intensity Across Industries) According to the Table, which industry is the MOST labor intensive?

According to the text, identical technologies are a more Reasonable assumption for:

Figure: A Country's Before and After Trade Equilibria (Figure: A Country's Before and After Trade Equilibria) What Are the pretrade quantities of shoes and computers Produced by this nation?

To determine whether a nation has an "abundance" of a Resource, economists look at:

Suppose that Home is a capital­abundant country.When Home trades with Foreign, a labor­abundant country, the HO model predicts that the price of:

The Heckscher­Ohlin model assumes that the factors of Production are mobile ______, but immobile _____.

The Leontief paradox questioned the validity of:

After accounting for differing _________ as well as _________, evidence for many countries is broadly Consistent with the Heckscher­Ohlin model.

In a capital­abundant country, free trade will cause a(n) __________ in the rental of capital and a(n) ____________ in the marginal product of capital.

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

Figure: A Country's Before and After Trade Equilibria (Figure: A Country's Before and After Trade Equilibria) What Are the posttrade quantities of shoes and computers Produced by this nation?

The HeckscherOhlin model assumes that technology in Each industry:

Suppose that Home is a capitalabundant country.When Home trades with Foreign, a laborabundant country, the HO model predicts that the price of:

The HeckscherOhlin model assumes that the factors of Production are mobile __, but immobile _.

After accounting for differing _ as well as _, evidence for many countries is broadly Consistent with the HeckscherOhlin model.

In a capitalabundant country, free trade will cause a(n) in the rental of capital and a(n) __ in the marginal product of capital.