Question 1

The Leontief paradox refers to the empirical result that:

Accepted Answer

A)  U.S. exports were more capital intensive than U.S. imports, even though the U.S. is regarded as a capital abundant country. 
B)  U.S. exports were more labor intensive than U.S. imports, even through the U.S. is regarded as a capital abundant country. 
C)  U.S. exports were more capital intensive than U.S. imports, even though the U.S. is regarded as a labor abundant country. 
D)  U.S. exports were more labor intensive than U.S. imports, even though the U.S. is regarded as a labor abundant country. 
E)  the U.S. only trade with other developed countries 
A)  U.S. exports were more capital intensive than U.S. imports, even though the U.S. is regarded as a capital abundant country. 
B)  U.S. exports were more labor intensive than U.S. imports, even through the U.S. is regarded as a capital abundant country. 
C)  U.S. exports were more capital intensive than U.S. imports, even though the U.S. is regarded as a labor abundant country. 
D)  U.S. exports were more labor intensive than U.S. imports, even though the U.S. is regarded as a labor abundant country. 
E)  the U.S. only trade with other developed countries

Question 2

When we say that steel is capital intensive with respect to wheat, this means that:

Accepted Answer

A)  more capital is used in the production of steel than for wheat. 
B)  less labor is used in the production of steel than for wheat. 
C)  a lower capital-to-labor ratio is used in the production of steel than wheat. 
D)  a higher capital-to-labor ratio is used in the production of steel than wheat. 
E)  the capital-to-labor ratio does not matter. 
A)  more capital is used in the production of steel than for wheat. 
B)  less labor is used in the production of steel than for wheat. 
C)  a lower capital-to-labor ratio is used in the production of steel than wheat. 
D)  a higher capital-to-labor ratio is used in the production of steel than wheat. 
E)  the capital-to-labor ratio does not matter.

Question 3

Assume that Mexico is labor abundant and the U.S. is capital abundant. Trade between Mexico and the U.S. would tend to:

Accepted Answer

A)  lower the price of capital in Mexico. 
B)  raise the price of capital in Mexico. 
C)  raise the price of labor in the U.S. 
D)  lower the price of capital in the U.S. 
E)  lower the prices of both factors in Mexico. 
A)  lower the price of capital in Mexico. 
B)  raise the price of capital in Mexico. 
C)  raise the price of labor in the U.S. 
D)  lower the price of capital in the U.S. 
E)  lower the prices of both factors in Mexico.

Question 4

The empirical result that U.S. exports seem to be labor-intensive if only capital and labor are used as factors of production is known as the:

Accepted Answer

A)  Leontief Paradox. 
B)  Smith's riddle. 
C)  Ricardo's advantage. 
D)  Krugman's puzzle. 
E)  None of the above 
A)  Leontief Paradox. 
B)  Smith's riddle. 
C)  Ricardo's advantage. 
D)  Krugman's puzzle. 
E)  None of the above

Question 5

A trade deficit occurs when:

Accepted Answer

A)  production in an economy is less than consumption. 
B)  consumption in an economy is less than production. 
C)  spending on housing is too low. 
D)  interest rates are very low. 
E)  immigration is restricted. 
A)  production in an economy is less than consumption. 
B)  consumption in an economy is less than production. 
C)  spending on housing is too low. 
D)  interest rates are very low. 
E)  immigration is restricted.

Question 6

Leontief showed that U.S. exports were capital intensive relative to U.S. imports.

Accepted Answer

A) True 
 B)False

Question 7

If the amount of capital and labor in Country A are $100 million and 100 million workers, and the amount of capital and labor in Country B are $50 million and 25 million workers, then:

Accepted Answer

A)  Country A is capital abundant compared to Country B. 
B)  Country B is capital abundant compared to Country A. 
C)  Country B is labor abundant compared to Country A. 
D)  both a and c 
E)  both b and c 
A)  Country A is capital abundant compared to Country B. 
B)  Country B is capital abundant compared to Country A. 
C)  Country B is labor abundant compared to Country A. 
D)  both a and c 
E)  both b and c

Question 8

When we say that wheat is labor intensive with respect to automobiles, this means that:

Accepted Answer

A)  more capital is used in the production of automobiles than wheat. 
B)  less labor is used in the production of automobiles than wheat. 
C)  a lower capital-to-labor ratio is used in the production of automobiles than wheat. 
D)  a higher capital-to-labor ratio is used in the production of automobiles than wheat. 
E)  wheat can be produced more cheaply than automobiles. 
A)  more capital is used in the production of automobiles than wheat. 
B)  less labor is used in the production of automobiles than wheat. 
C)  a lower capital-to-labor ratio is used in the production of automobiles than wheat. 
D)  a higher capital-to-labor ratio is used in the production of automobiles than wheat. 
E)  wheat can be produced more cheaply than automobiles.

Question 9

A country will have a comparative advantage in goods whose production:

Accepted Answer

A)  uses its relatively most abundant resource. 
B)  has a higher wage rate than the other country. 
C)  is not in high demand relative to other countries products. 
D)  intensively uses its relatively scarce factor of production. 
E)  does not use either labor or capital. 
A)  uses its relatively most abundant resource. 
B)  has a higher wage rate than the other country. 
C)  is not in high demand relative to other countries products. 
D)  intensively uses its relatively scarce factor of production. 
E)  does not use either labor or capital.

Question 10

Which of the following statements is true?

Accepted Answer

A)  GDP per capita in India is higher than it is in South Korea. 
B)  The capital/labor ratio is higher in India than it is in South Korea. 
C)  The openness index is higher for India than it is for South Korea. 
D)  GDP per capita in South Korea now is higher than it is in India. 
E)  GDP per capita is the same in both countries. 
A)  GDP per capita in India is higher than it is in South Korea. 
B)  The capital/labor ratio is higher in India than it is in South Korea. 
C)  The openness index is higher for India than it is for South Korea. 
D)  GDP per capita in South Korea now is higher than it is in India. 
E)  GDP per capita is the same in both countries.

Question 11

Countries will tend to export products that intensively utilize their abundant factor of production.

Accepted Answer

A) True 
 B)False

Question 12

International trade tends to raise the amount of national income received by the abundant factor of production.

Accepted Answer

A) True 
 B)False

Question 13

Initial empirical tests of the factor-proportions theory of international trade showed that U.S. exports tended to be labor intensive. This perverse empirical result is known as:

Accepted Answer

A)  Krugman's puzzle. 
B)  Ricardo's problem. 
C)  Adam Smith's dilemma. 
D)  the Leontief Paradox. 
E)  None of the above 
A)  Krugman's puzzle. 
B)  Ricardo's problem. 
C)  Adam Smith's dilemma. 
D)  the Leontief Paradox. 
E)  None of the above

Question 14

International trade tends to lower the amount of national income received by the abundant factor of production.

Accepted Answer

A) True 
 B)False

Question 15

International trade would tend to make the scarce factor of production in a country cheaper.

Accepted Answer

A) True 
 B)False

Question 16

The Leontief tests of the 1950s confirmed the factor-proportions theory in explaining the commodity composition of U.S. trade.

Accepted Answer

A) True 
 B)False

Question 17

The factor-proportions theory of international trade perfectly explains all trade patterns using only capital and labor as variables.

Accepted Answer

A) True 
 B)False

Question 18

A country that is capital abundant would tend to import capital-intensive products and export labor-intensive products.

Accepted Answer

A) True 
 B)False

Question 19

Assume that the U.S. is relatively capital abundant, and Mexico is relatively labor abundant. Further, assume that the production of wheat is capital intensive and the production of iron is labor intensive. Which of the following would be true?

Accepted Answer

A)  Mexico would tend to export wheat. 
B)  Mexico would tend to import wheat. 
C)  The U.S. would tend to export iron. 
D)  The U.S. would tend to import wheat. 
E)  Mexico would import both iron and wheat. 
A)  Mexico would tend to export wheat. 
B)  Mexico would tend to import wheat. 
C)  The U.S. would tend to export iron. 
D)  The U.S. would tend to import wheat. 
E)  Mexico would import both iron and wheat.

Question 20

The factor-proportions theory was formulated by Adam Smith and David Ricardo.

Accepted Answer

A) True 
 B)False

The Leontief paradox refers to the empirical result that:

When we say that steel is capital intensive with respect to wheat, this means that:

Assume that Mexico is labor abundant and the U.S. is capital abundant. Trade between Mexico and the U.S. would tend to:

The empirical result that U.S. exports seem to be labor-intensive if only capital and labor are used as factors of production is known as the:

A trade deficit occurs when:

Leontief showed that U.S. exports were capital intensive relative to U.S. imports.

If the amount of capital and labor in Country A are $100 million and 100 million workers, and the amount of capital and labor in Country B are $50 million and 25 million workers, then:

When we say that wheat is labor intensive with respect to automobiles, this means that:

A country will have a comparative advantage in goods whose production:

Which of the following statements is true?

Countries will tend to export products that intensively utilize their abundant factor of production.

International trade tends to raise the amount of national income received by the abundant factor of production.

Initial empirical tests of the factor-proportions theory of international trade showed that U.S. exports tended to be labor intensive. This perverse empirical result is known as:

International trade tends to lower the amount of national income received by the abundant factor of production.

International trade would tend to make the scarce factor of production in a country cheaper.

The Leontief tests of the 1950s confirmed the factor-proportions theory in explaining the commodity composition of U.S. trade.

The factor-proportions theory of international trade perfectly explains all trade patterns using only capital and labor as variables.

A country that is capital abundant would tend to import capital-intensive products and export labor-intensive products.

Assume that the U.S. is relatively capital abundant, and Mexico is relatively labor abundant. Further, assume that the production of wheat is capital intensive and the production of iron is labor intensive. Which of the following would be true?

The factor-proportions theory was formulated by Adam Smith and David Ricardo.

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

The Leontief paradox refers to the empirical result that:

When we say that steel is capital intensive with respect to wheat, this means that:

Assume that Mexico is labor abundant and the U.S. is capital abundant. Trade between Mexico and the U.S. would tend to:

The empirical result that U.S. exports seem to be labor-intensive if only capital and labor are used as factors of production is known as the:

A trade deficit occurs when:

Leontief showed that U.S. exports were capital intensive relative to U.S. imports.

If the amount of capital and labor in Country A are $100 million and 100 million workers, and the amount of capital and labor in Country B are $50 million and 25 million workers, then:

When we say that wheat is labor intensive with respect to automobiles, this means that:

A country will have a comparative advantage in goods whose production:

Which of the following statements is true?

Countries will tend to export products that intensively utilize their abundant factor of production.

International trade tends to raise the amount of national income received by the abundant factor of production.

Initial empirical tests of the factor-proportions theory of international trade showed that U.S. exports tended to be labor intensive. This perverse empirical result is known as:

International trade tends to lower the amount of national income received by the abundant factor of production.

International trade would tend to make the scarce factor of production in a country cheaper.

The Leontief tests of the 1950s confirmed the factor-proportions theory in explaining the commodity composition of U.S. trade.

The factor-proportions theory of international trade perfectly explains all trade patterns using only capital and labor as variables.

A country that is capital abundant would tend to import capital-intensive products and export labor-intensive products.

Assume that the U.S. is relatively capital abundant, and Mexico is relatively labor abundant. Further, assume that the production of wheat is capital intensive and the production of iron is labor intensive. Which of the following would be true?

The factor-proportions theory was formulated by Adam Smith and David Ricardo.

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