Question 1

Trade Adjustment Assistance is common in other countries but has never been available to American workers.

Accepted Answer

A) True 
 B)False

Question 2

The factor-proportions theory of international trade implies that countries would tend to:

Accepted Answer

A)  export products that intensively utilize their scarce factor of production. 
B)  import products that intensively utilize their abundant factor of production. 
C)  export products that intensively utilize their abundant factor of production. 
D)  import products that intensively utilize their unknown factor of production. 
E)  None of the above 
A)  export products that intensively utilize their scarce factor of production. 
B)  import products that intensively utilize their abundant factor of production. 
C)  export products that intensively utilize their abundant factor of production. 
D)  import products that intensively utilize their unknown factor of production. 
E)  None of the above

Question 3

The abundance of a particular factor of production in a country tends to make that factor:

Accepted Answer

A)  more costly relative to the cost of the same factor in other countries. 
B)  more costly relative to other factors within the country. 
C)  less costly relative to the cost of the same factor in other countries. 
D)  very cheap in dollar terms. 
E)  All of the above 
A)  more costly relative to the cost of the same factor in other countries. 
B)  more costly relative to other factors within the country. 
C)  less costly relative to the cost of the same factor in other countries. 
D)  very cheap in dollar terms. 
E)  All of the above

Question 4

Discuss how international trade tends to change the industrial structure of a country.

Accepted Answer

International trade can have a significa

Question 5

Suppose that Bolivia is labor abundant, and the production of trinkets is labor intensive. Which of the following statements would be false?

Accepted Answer

A)  The relative price of labor would tend to be low in Bolivia. 
B)  Bolivia would tend to export trinkets. 
C)  Bolivia does not have a comparative advantage in trinkets. 
D)  Bolivia has a comparative advantage in trinkets. 
E)  Bolivia will not trade with Chile. 
A)  The relative price of labor would tend to be low in Bolivia. 
B)  Bolivia would tend to export trinkets. 
C)  Bolivia does not have a comparative advantage in trinkets. 
D)  Bolivia has a comparative advantage in trinkets. 
E)  Bolivia will not trade with Chile.

Question 6

The factor-proportions theory of international trade states that:

Accepted Answer

A)  a country should export the good with the highest output per unit of labor. 
B)  a country will export the good that requires more intensive use of its abundant factor. 
C)  a country should import the good that uses capital most intensively. 
D)  a country should export the factor that receives a higher wage in the other country. 
E)  All of the above 
A)  a country should export the good with the highest output per unit of labor. 
B)  a country will export the good that requires more intensive use of its abundant factor. 
C)  a country should import the good that uses capital most intensively. 
D)  a country should export the factor that receives a higher wage in the other country. 
E)  All of the above

Question 7

The factor-proportions theory predicts that the pattern of trade is determined mostly by country differences in tastes and preferences.

Accepted Answer

A) True 
 B)False

Question 8

If a country is abundant in labor then it would tend to:

Accepted Answer

A)  import labor-intensive products. 
B)  export labor-intensive products. 
C)  export capital-intensive products. 
D)  both export and import labor-intensive products. 
E)  not import either product. 
A)  import labor-intensive products. 
B)  export labor-intensive products. 
C)  export capital-intensive products. 
D)  both export and import labor-intensive products. 
E)  not import either product.

Question 9

According to factor price equalization, if Country B is labor abundant as international trade occurs then:

Accepted Answer

A)  labor should be opposed to international trade. 
B)  the owners of capital should be opposed to international trade. 
C)  both labor and the owners of capital should be opposed to international trade. 
D)  both labor and the owners of capital should be in favor of international trade. 
E)  None of the above 
A)  labor should be opposed to international trade. 
B)  the owners of capital should be opposed to international trade. 
C)  both labor and the owners of capital should be opposed to international trade. 
D)  both labor and the owners of capital should be in favor of international trade. 
E)  None of the above

Question 10

International trade tends to:

Accepted Answer

A)  have no effect on factor prices. 
B)  cause all factor prices to fall. 
C)  cause the price of the scarce factor to rise and the price of the abundant factor to fall. 
D)  cause the price of the scarce factor to fall and the price of the abundant factor to rise. 
E)  not influence factor prices. 
A)  have no effect on factor prices. 
B)  cause all factor prices to fall. 
C)  cause the price of the scarce factor to rise and the price of the abundant factor to fall. 
D)  cause the price of the scarce factor to fall and the price of the abundant factor to rise. 
E)  not influence factor prices.

Question 11

A country that is labor abundant relative to another country will have which one of the following advantages?

Accepted Answer

A)  a larger labor force 
B)  the price paid to labor will be absolutely cheaper. 
C)  relatively cheaper labor 
D)  faster access to labor 
E)  cheap capital 
A)  a larger labor force 
B)  the price paid to labor will be absolutely cheaper. 
C)  relatively cheaper labor 
D)  faster access to labor 
E)  cheap capital

Question 12

No member of society ever loses because of international trade.

Accepted Answer

A) True 
 B)False

Question 13

The factor-proportions theory states that a country will have a comparative advantage in the good whose production is relatively intensive in the factor in which the country is relatively abundant.

Accepted Answer

A) True 
 B)False

Question 14

In the specific-factors model:

Accepted Answer

A)  owners of the specific factor should be in favor of international trade in all cases. 
B)  owners of the specific factor should be opposed to international trade in all cases. 
C)  owners of the specific factor in the comparative disadvantage industry should be in favor of international trade. 
D)  owners of the specific factor in the comparative advantage industry should be in favor of international trade. 
E)  factors of production never move. 
A)  owners of the specific factor should be in favor of international trade in all cases. 
B)  owners of the specific factor should be opposed to international trade in all cases. 
C)  owners of the specific factor in the comparative disadvantage industry should be in favor of international trade. 
D)  owners of the specific factor in the comparative advantage industry should be in favor of international trade. 
E)  factors of production never move.

Question 15

If Canada is relatively capital abundant and Mexico is relatively labor abundant, this means that the capital-to-labor ratio in Canada is greater than the capital-to- labor ratio in Mexico.

Accepted Answer

A) True 
 B)False

Question 16

List the assumptions of the factor-proportions theory of international trade.

Accepted Answer

The factor-proportions theory, also know

Question 17

How does trade affect the distribution of income?

Accepted Answer

Trade can significantly affect the distr

Question 18

According to the Stopler-Samuelson theorem, the scarce factor of production in a country should oppose international trade.

Accepted Answer

A) True 
 B)False

Question 19

Leontief found that:

Accepted Answer

A)  U.S. exports are neither labor nor capital intensive. 
B)  U.S. exports are capital intensive relative to U.S. imports. 
C)  U.S. imports are capital intensive relative to U.S. exports. 
D)  U.S. trade conforms perfectly to the predictions of the factor-proportions model. 
E)  capital was scarce in the U.S. 
A)  U.S. exports are neither labor nor capital intensive. 
B)  U.S. exports are capital intensive relative to U.S. imports. 
C)  U.S. imports are capital intensive relative to U.S. exports. 
D)  U.S. trade conforms perfectly to the predictions of the factor-proportions model. 
E)  capital was scarce in the U.S.

Question 20

According to the factor-proportions theory, the source of comparative advantage is a country's:

Accepted Answer

A)  physical size. 
B)  population. 
C)  advertising. 
D)  factor endowments. 
E)  geographical location. 
A)  physical size. 
B)  population. 
C)  advertising. 
D)  factor endowments. 
E)  geographical location.

Trade Adjustment Assistance is common in other countries but has never been available to American workers.

The factor-proportions theory of international trade implies that countries would tend to:

The abundance of a particular factor of production in a country tends to make that factor:

Discuss how international trade tends to change the industrial structure of a country.

Suppose that Bolivia is labor abundant, and the production of trinkets is labor intensive. Which of the following statements would be false?

The factor-proportions theory of international trade states that:

The factor-proportions theory predicts that the pattern of trade is determined mostly by country differences in tastes and preferences.

If a country is abundant in labor then it would tend to:

According to factor price equalization, if Country B is labor abundant as international trade occurs then:

International trade tends to:

A country that is labor abundant relative to another country will have which one of the following advantages?

No member of society ever loses because of international trade.

The factor-proportions theory states that a country will have a comparative advantage in the good whose production is relatively intensive in the factor in which the country is relatively abundant.

In the specific-factors model:

If Canada is relatively capital abundant and Mexico is relatively labor abundant, this means that the capital-to-labor ratio in Canada is greater than the capital-to- labor ratio in Mexico.

List the assumptions of the factor-proportions theory of international trade.

How does trade affect the distribution of income?

According to the Stopler-Samuelson theorem, the scarce factor of production in a country should oppose international trade.

Leontief found that:

According to the factor-proportions theory, the source of comparative advantage is a country's:

Introduction: An Overview of the World Economy

Why Countries Trade

Comparative Advantage and the Production Possibilities Frontier

Intra-Industry Trade

The Firm in the World Economy

International Factor Movements

Tariffs

Nontariff Distortions to Trade

International Trade Policy

Regional Economic Arrangements

International Trade and Economic Growth

National Income Accounting and the Balance of Payments

Exchange Rates and Their Determination: A Basic Model

Money, Interest Rates, and the Exchange Rate

Open Economy Macroeconomics

Macroeconomic Policy and Floating Exchange Rates

Fixed Exchange Rates and Currency Unions

International Monetary Arrangements

Capital Flows and the Developing Countries

Filters

Exam 4: Factor Endowments and the Commodity Composition of Trade

Trade Adjustment Assistance is common in other countries but has never been available to American workers.

The factor-proportions theory of international trade implies that countries would tend to:

The abundance of a particular factor of production in a country tends to make that factor:

Discuss how international trade tends to change the industrial structure of a country.

Suppose that Bolivia is labor abundant, and the production of trinkets is labor intensive. Which of the following statements would be false?

The factor-proportions theory of international trade states that:

The factor-proportions theory predicts that the pattern of trade is determined mostly by country differences in tastes and preferences.

If a country is abundant in labor then it would tend to:

According to factor price equalization, if Country B is labor abundant as international trade occurs then:

International trade tends to:

A country that is labor abundant relative to another country will have which one of the following advantages?

No member of society ever loses because of international trade.

The factor-proportions theory states that a country will have a comparative advantage in the good whose production is relatively intensive in the factor in which the country is relatively abundant.

In the specific-factors model:

If Canada is relatively capital abundant and Mexico is relatively labor abundant, this means that the capital-to-labor ratio in Canada is greater than the capital-to- labor ratio in Mexico.

List the assumptions of the factor-proportions theory of international trade.

How does trade affect the distribution of income?

According to the Stopler-Samuelson theorem, the scarce factor of production in a country should oppose international trade.

Leontief found that:

According to the factor-proportions theory, the source of comparative advantage is a country's:

Introduction: An Overview of the World Economy

Why Countries Trade

Comparative Advantage and the Production Possibilities Frontier

Intra-Industry Trade

The Firm in the World Economy

International Factor Movements

Tariffs

Nontariff Distortions to Trade

International Trade Policy

Regional Economic Arrangements

International Trade and Economic Growth

National Income Accounting and the Balance of Payments

Exchange Rates and Their Determination: A Basic Model

Money, Interest Rates, and the Exchange Rate

Open Economy Macroeconomics

Macroeconomic Policy and Floating Exchange Rates

Fixed Exchange Rates and Currency Unions

International Monetary Arrangements

Capital Flows and the Developing Countries

Filters