Question 1

The Stolper­Samuelson theorem suggests that, over time,
Free international trade should lead to:

Accepted Answer

A) equalization of real wages across the world. 
B) greater divergences in real wages across the world. 
C) equalization of prices across the world. 
D) greater divergences in prices across the world. 
A) equalization of real wages across the world. 
B) greater divergences in real wages across the world. 
C) equalization of prices across the world. 
D) greater divergences in prices across the world.

Question 2

As trade occurs, increased imports will force domestic
Import­competing firms to decrease price and production.
Labor and capital will move to exporting firms.What will
Then happen to wages and returns to capital?

Accepted Answer

A) Both wages and returns to capital will increase. 
B) Both wages and returns to capital will decrease. 
C) Wages will increase and returns to capital will decrease. 
D) Wages will decrease and returns to capital will increase. 
A) Both wages and returns to capital will increase. 
B) Both wages and returns to capital will decrease. 
C) Wages will increase and returns to capital will decrease. 
D) Wages will decrease and returns to capital will increase.

Question 3

Which of the following statements is CORRECT?

Accepted Answer

A) The HO model assumes that all resources can freely move between industries. 
B) The specific­factors model assumes that all resources can freely move between industries. 
C) Both the HO and the specific­factor models assume that all resources can freely move between industries. 
D) Neither the HO nor the specific­factor model assumes that all resources can freely move between industries. 
A) The HO model assumes that all resources can freely move between industries. 
B) The specific­factors model assumes that all resources can freely move between industries. 
C) Both the HO and the specific­factor models assume that all resources can freely move between industries. 
D) Neither the HO nor the specific­factor model assumes that all resources can freely move between industries.

Question 4

The PPF of a country will be skewed toward the good that:

Accepted Answer

A) uses its scarce factor intensively. 
B) uses its abundant factor intensively. 
C) uses its intensive factor abundantly. 
D) does not use its intensive factor abundantly. 
A) uses its scarce factor intensively. 
B) uses its abundant factor intensively. 
C) uses its intensive factor abundantly. 
D) does not use its intensive factor abundantly.

Question 5

Leontief discovered a "paradox" in his test of the HO­model
For the United States.He expected the United States to
Export _____­intensive goods and import _____­ intensive
Goods; but his study indicated the reverse was TRUE.

Accepted Answer

A) land; technology 
B) labor; land 
C) capital; labor 
D) labor; capital 
A) land; technology 
B) labor; land 
C) capital; labor 
D) labor; capital

Question 6

Leontief's study of U.S.post­World War II trade concluded
That the:

Accepted Answer

A) United States did not gain from trade. 
B) United States exported labor­intensive goods 
C) HO model did not explain trade between Europe and the United States. 
D) United States exported capital­intensive goods. 
A) United States did not gain from trade. 
B) United States exported labor­intensive goods 
C) HO model did not explain trade between Europe and the United States. 
D) United States exported capital­intensive goods.

Question 7

Malaysia is relatively abundant in labor, whereas Canada is
Relatively abundant in capital.In both countries, shirt
Production is relatively more labor intensive than computer
Production.According to the Heckscher­Ohlin model,
Malaysia will have a(n) ________ advantage in the
Production of __________.

Accepted Answer

A) absolute; shirts and computers 
B) absolute; computers 
C) comparative; shirts 
D) comparative; computers 
A) absolute; shirts and computers 
B) absolute; computers 
C) comparative; shirts 
D) comparative; computers

Question 8

Wages generally:

Accepted Answer

A) are higher in labor­abundant countries than in capital­ abundant countries. 
B) are lower in labor­abundant countries than in capital­ abundant countries. 
C) are the same in both labor­abundant and capital­ abundant countries. 
D) have no relationship to labor abundance. 
A) are higher in labor­abundant countries than in capital­ abundant countries. 
B) are lower in labor­abundant countries than in capital­ abundant countries. 
C) are the same in both labor­abundant and capital­ abundant countries. 
D) have no relationship to labor abundance.

Question 9

What was "paradoxical" about Leontief's test of the HO
Model on U.S.trade?

Accepted Answer

A) Leontief concluded that U.S.imports were more labor intensive than U.S.exports. 
B) Leontief concluded that U.S.imports were more capital intensive than U.S.exports. 
C) Leontief concluded that U.S.imports were primarily agricultural products. 
D) Leontief concluded that U.S.exports were not internationally competitive. 
A) Leontief concluded that U.S.imports were more labor intensive than U.S.exports. 
B) Leontief concluded that U.S.imports were more capital intensive than U.S.exports. 
C) Leontief concluded that U.S.imports were primarily agricultural products. 
D) Leontief concluded that U.S.exports were not internationally competitive.

Question 10

The international equilibrium price (or world price) and
Quantity for a traded item is determined by:

Accepted Answer

A) the WTO. 
B) the U.S.Department of Commerce. 
C) the intersection of the export supply schedule and the import demand schedule. 
D) trade negotiations conducted by representatives in the two nations. 
A) the WTO. 
B) the U.S.Department of Commerce. 
C) the intersection of the export supply schedule and the import demand schedule. 
D) trade negotiations conducted by representatives in the two nations.

Question 11

(Table: Capital Intensity Across Industries) Suppose that
The United States is labor abundant relative to Canada.
According to the table, which of the following U.S.
Industry(ies) is (are) MOST likely to export products to
Canada?

Accepted Answer

A) Furniture 
B) Electronic and electrical equipment 
C) Primary metal industries 
D) Paper and allied products 
A) Furniture 
B) Electronic and electrical equipment 
C) Primary metal industries 
D) Paper and allied products

Question 12

Suppose Portugal has 700 workers and 26,000 units of
Capital, and France has 18,000 workers and 700 units of
Capital.Technology is identical in both countries.Assume
That wine is the capital­intensive good and cloth is the
Labor­intensive good.Which of the following statements is
CORRECT if the nations start trading with each other?

Accepted Answer

A) Wages will increase in Portugal. 
B) Rental rates in France will increase. 
C) Wages in France will decrease. 
D) Rental rates in Portugal will increase. 
A) Wages will increase in Portugal. 
B) Rental rates in France will increase. 
C) Wages in France will decrease. 
D) Rental rates in Portugal will increase.

Question 13

According to the Heckscher­Ohlin model, international
Trade for a nation with a relative abundance of skilled labor
And a relative scarcity of unskilled labor will tend to:

Accepted Answer

A) widen or aggravate the income disparity between skilled and unskilled workers. 
B) reduce the income disparity between skilled and unskilled workers. 
C) lower the wages of both groups of workers. 
D) raise the wages of both groups of workers. 
A) widen or aggravate the income disparity between skilled and unskilled workers. 
B) reduce the income disparity between skilled and unskilled workers. 
C) lower the wages of both groups of workers. 
D) raise the wages of both groups of workers.

The StolperSamuelson theorem suggests that, over time, Free international trade should lead to:

As trade occurs, increased imports will force domestic Importcompeting firms to decrease price and production. Labor and capital will move to exporting firms.What will Then happen to wages and returns to capital?

Which of the following statements is CORRECT?

The PPF of a country will be skewed toward the good that:

Leontief discovered a "paradox" in his test of the HOmodel For the United States.He expected the United States to Export _intensive goods and import _ intensive Goods; but his study indicated the reverse was TRUE.

Leontief's study of U.S.postWorld War II trade concluded That the:

Malaysia is relatively abundant in labor, whereas Canada is Relatively abundant in capital.In both countries, shirt Production is relatively more labor intensive than computer Production.According to the HeckscherOhlin model, Malaysia will have a(n) advantage in the Production of __.

Wages generally:

What was "paradoxical" about Leontief's test of the HO Model on U.S.trade?

The international equilibrium price (or world price) and Quantity for a traded item is determined by:

(Table: Capital Intensity Across Industries) Suppose that The United States is labor abundant relative to Canada. According to the table, which of the following U.S. Industry(ies) is (are) MOST likely to export products to Canada?

According to the HeckscherOhlin model, international Trade for a nation with a relative abundance of skilled labor And a relative scarcity of unskilled labor will tend to:

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

The Stolper­Samuelson theorem suggests that, over time, Free international trade should lead to:

As trade occurs, increased imports will force domestic Import­competing firms to decrease price and production. Labor and capital will move to exporting firms.What will Then happen to wages and returns to capital?

Which of the following statements is CORRECT?

The PPF of a country will be skewed toward the good that:

Leontief discovered a "paradox" in his test of the HO­model For the United States.He expected the United States to Export _____­intensive goods and import _____­ intensive Goods; but his study indicated the reverse was TRUE.

Leontief's study of U.S.post­World War II trade concluded That the:

Wages generally:

What was "paradoxical" about Leontief's test of the HO Model on U.S.trade?

The international equilibrium price (or world price) and Quantity for a traded item is determined by:

(Table: Capital Intensity Across Industries) Suppose that The United States is labor abundant relative to Canada. According to the table, which of the following U.S. Industry(ies) is (are) MOST likely to export products to Canada?

According to the Heckscher­Ohlin model, international Trade for a nation with a relative abundance of skilled labor And a relative scarcity of unskilled labor will tend to:

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 StolperSamuelson theorem suggests that, over time, Free international trade should lead to:

As trade occurs, increased imports will force domestic Importcompeting firms to decrease price and production. Labor and capital will move to exporting firms.What will Then happen to wages and returns to capital?

Leontief discovered a "paradox" in his test of the HOmodel For the United States.He expected the United States to Export _intensive goods and import _ intensive Goods; but his study indicated the reverse was TRUE.

Leontief's study of U.S.postWorld War II trade concluded That the:

According to the HeckscherOhlin model, international Trade for a nation with a relative abundance of skilled labor And a relative scarcity of unskilled labor will tend to: