Exam 5: Resources and Trade: the Heckscher-Ohlin Model

If Australia has relatively more land per worker, and Belgium has relatively more capital per worker, then if trade began between these two countries

-Refer to above figure. Would you expect to find that the real wages become equalized in both countries? Explain the reason for any differences you note.

In the 2-factor, 2-good Heckscher-Ohlin model, the country with a relative abundance of ________ will have a production possibility frontier that is biased toward production of the ________ good.

Assume that only two countries, A and B, exist. -Refer to the table above. If you are told that Country B is very much richer than Country A, then the correct answer is

One way in which the Heckscher-Ohlin model differs from the Ricardo model of comparative advantage is by assuming that ________ is (are) identical in all countries.

The 1987 study by Bowen, Leamer and Sveikauskas

If Gambinia has many workers but very little land and even less productive capital, then, following the Heckscher-Ohlin model, in order to improve the country's economic welfare, the Gambinian government should

In the 2-factor, 2-good Heckscher-Ohlin model, trade will ________ the owners of a country's ________ factor and will ________ the good that uses that factor intensively.

Which of the following is an assertion of the Heckscher-Ohlin model?

The Heckscher-Ohlin model differs from the Ricardian model of Comparative Advantage in that the former

In the Heckscher-Ohlin model, countries are assumed to differ only in terms of their

Empirical support for the Heckscher-Ohlin model was weakest when the study applied

Which of the following empirical studies provided the most support for the heckscher-Ohlin model?

Assume that only two countries, A and B, exist. -Refer to the table above. If good S is capital intensive, then following the Heckscher-Ohlin Theory

If two countries are very different in relative factor abundance, then empirical support for which of the following would be less likely?

In the 2-factor, 2-good Heckscher-Ohlin model, an influx of workers from across the border would

Starting from an autarky (no-trade) situation with Heckscher-Ohlin model, if Country H is relatively labor abundant, then once trade begins

-Refer to above figure. In autarky, Country P was producing at point 5. With trade, would its production point be found above or below point 5? Explain why. What must happen in the K/L intensity ratio in the production of each of the products in this country when moving from autarky to free trade?

Why is the H.O. model called the factor-proportions theory?

If a good is capital intensive it means that the good is produced