Question 1

Most theories of comparative advantage explain trade patterns due to international differences in

Accepted Answer

A) demand conditions. 
B) supply conditions. 
C) demand and supply conditions. 
D) tariffs. 
A) demand conditions. 
B) supply conditions. 
C) demand and supply conditions. 
D) tariffs. B

Question 2

Compare and contrast the predictions of the Heckscher-Ohlin and classical models about likely trading partners of various countries with the predictions of the Linder hypothesis.

Accepted Answer

Both the classical and the HO models argue that the gains from trade emanate from different autarky relative prices.Consequently,differences in technology or factor endowments would seem to imply the possibility to exploit these gains.Linder argues that countries with similar standards of living (i.e.similar factor endowments or technologies)will produce similar types of goods and hence benefit by trading extensively,due largely to the availability through trade of an increased variety of goods.

Question 3

A possible reconciliation of the Leontief Paradox is that the United States has high tariffs on capital intensive goods and low tariffs on labor intensive goods.

Accepted Answer

A) True 
 B)False  False

Question 4

Leontief reconciled his results by arguing that

Accepted Answer

A) American labor is more efficient than foreign. 
B) American capital is more efficient than foreign. 
C) Foreign capital is more efficient than American. 
D) Foreign labor is more efficient than American. 
A) American labor is more efficient than foreign. 
B) American capital is more efficient than foreign. 
C) Foreign capital is more efficient than American. 
D) Foreign labor is more efficient than American.

Question 5

Intraindustry trade is most common in the trade patterns of

Accepted Answer

A) developing countries of Asia and Africa. 
B) developed countries of Western Europe. 
C) all countries. 
D) None of the above. 
A) developing countries of Asia and Africa. 
B) developed countries of Western Europe. 
C) all countries. 
D) None of the above.

Question 6

Leontief found that

Accepted Answer

A) U.S. exports are capital intensive relative to U.S. imports. 
B) U.S. imports are labor intensive relative to U.S. exports. 
C) U.S. exports are neither labor nor capital intensive. 
D) None of the above. 
A) U.S. exports are capital intensive relative to U.S. imports. 
B) U.S. imports are labor intensive relative to U.S. exports. 
C) U.S. exports are neither labor nor capital intensive. 
D) None of the above.

Question 7

MacDougall showed in his tests that

Accepted Answer

A) relatively higher U.S. labor productivity was associated with relatively higher U.K. export ratios. 
B) relatively higher U.K. labor productivity was associated with relatively higher U.K. export ratios. 
C) labor productivity ratios and export ratios were not associated with each other. 
D) None of the above. 
A) relatively higher U.S. labor productivity was associated with relatively higher U.K. export ratios. 
B) relatively higher U.K. labor productivity was associated with relatively higher U.K. export ratios. 
C) labor productivity ratios and export ratios were not associated with each other. 
D) None of the above.

Question 8

MacDougall's test provides evidence that exports are positively related to labor productivity.

Accepted Answer

A) True 
 B)False

Question 9

Tests of the Heckscher-Ohlin model by Bowen,Leamer,and Sveikauskas and by Maskus continue to

Accepted Answer

A) provide strong support for the theory. 
B) provide weak support for the theory. 
C) provide evidence against the theory. 
A) provide strong support for the theory. 
B) provide weak support for the theory. 
C) provide evidence against the theory.

Question 10

According to the human skills theory

Accepted Answer

A) trade patterns depend upon a country's relative endowment of skilled workers. 
B) countries with large endowments of skilled labor will have comparative advantage in skilled labor intensive products. 
C) the Leontief paradox is explained by the fact that the United States is relatively skilled labor abundant. 
D) All of the above. 
A) trade patterns depend upon a country's relative endowment of skilled workers. 
B) countries with large endowments of skilled labor will have comparative advantage in skilled labor intensive products. 
C) the Leontief paradox is explained by the fact that the United States is relatively skilled labor abundant. 
D) All of the above.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

The finding that U.S.exports tend to come from labor-intensive industries,while U.S.imports are produced using relatively capital intensive techniques is known as

Accepted Answer

A) the Leontief paradox. 
B) the balance of trade enigma. 
C) the Heckscher-Ohlin paradox. 
D) the Krugman finding. 
A) the Leontief paradox. 
B) the balance of trade enigma. 
C) the Heckscher-Ohlin paradox. 
D) the Krugman finding.

Question 13

If one allows natural resources to be a factor of production,then it is possible to explain the Leontief Paradox for the United States on the grounds that U.S.imports are natural resource intensive.

Accepted Answer

A) True 
 B)False

Question 14

MacDougall's results can be interpreted as

Accepted Answer

A) evidence against the classical model. 
B) evidence against the Heckscher-Ohlin model. 
C) support for the classical model. 
D) support for the Heckscher-Ohlin model. 
A) evidence against the classical model. 
B) evidence against the Heckscher-Ohlin model. 
C) support for the classical model. 
D) support for the Heckscher-Ohlin model.

Question 15

As of 2004,the U.S.,Canada,and Western Europe account for 60 percent of the world's annual consumption of goods and services while having only about 11 percent of the world's population.

Accepted Answer

A) True 
 B)False

Question 16

If output more than doubles when all inputs are doubled,production is said to occur under conditions of

Accepted Answer

A) increasing returns to scale. 
B) imperfect competition. 
C) intraindustry trade. 
D) interindustry trade. 
A) increasing returns to scale. 
B) imperfect competition. 
C) intraindustry trade. 
D) interindustry trade.

Question 17

If some industries exhibit increasing returns to scale in each country,we should not expect to see

Accepted Answer

A) intraindustry trade between countries. 
B) perfect competition in these industries. 
C) interindustry trade between countries. 
D) Either B or C. 
A) intraindustry trade between countries. 
B) perfect competition in these industries. 
C) interindustry trade between countries. 
D) Either B or C.

Question 18

The product life cycle model says that comparative advantage in manufactured goods may move from one country to another as a product becomes more standardized.

Accepted Answer

A) True 
 B)False

Question 19

According to the product life cycle model,comparative advantage

Accepted Answer

A) may move from one country to another as a product matures. 
B) always stays in the country where a product is invented. 
C) in agricultural or homogeneous manufactured goods is determined by the stage of the life cycle these products are in. 
D) Both A and C. 
A) may move from one country to another as a product matures. 
B) always stays in the country where a product is invented. 
C) in agricultural or homogeneous manufactured goods is determined by the stage of the life cycle these products are in. 
D) Both A and C.

Question 20

Does the presence in the real world of intraindustry trade prove or disprove the classical or Heckscher-Ohlin models? Explain.

Accepted Answer

It does not disprove these theories,but

Most theories of comparative advantage explain trade patterns due to international differences in

Compare and contrast the predictions of the Heckscher-Ohlin and classical models about likely trading partners of various countries with the predictions of the Linder hypothesis.

A possible reconciliation of the Leontief Paradox is that the United States has high tariffs on capital intensive goods and low tariffs on labor intensive goods.

Leontief reconciled his results by arguing that

Intraindustry trade is most common in the trade patterns of

Leontief found that

MacDougall showed in his tests that

MacDougall's test provides evidence that exports are positively related to labor productivity.

Tests of the Heckscher-Ohlin model by Bowen,Leamer,and Sveikauskas and by Maskus continue to

According to the human skills theory

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

The finding that U.S.exports tend to come from labor-intensive industries,while U.S.imports are produced using relatively capital intensive techniques is known as

If one allows natural resources to be a factor of production,then it is possible to explain the Leontief Paradox for the United States on the grounds that U.S.imports are natural resource intensive.

MacDougall's results can be interpreted as

As of 2004,the U.S.,Canada,and Western Europe account for 60 percent of the world's annual consumption of goods and services while having only about 11 percent of the world's population.

If output more than doubles when all inputs are doubled,production is said to occur under conditions of

If some industries exhibit increasing returns to scale in each country,we should not expect to see

The product life cycle model says that comparative advantage in manufactured goods may move from one country to another as a product becomes more standardized.

According to the product life cycle model,comparative advantage

Does the presence in the real world of intraindustry trade prove or disprove the classical or Heckscher-Ohlin models? Explain.

An Introduction to International Trade

Tools of Analysis for International Trade Models

The Classical Model of International Trade

The Heckscher-Ohlin Model

Tariffs

Nontariff Barriers and Arguments for Protection

Commercial Policy: History and Practice

Preferential Trade Agreements

International Trade and Economic Growth

The Balance of Payments

The Foreign Exchange Market

International Monetary Systems

Exchange Rates in the Short Run

Exchange Rates in the Long Run

Theories of the Current Account Balance

Open Economy Macroeconomics

International Banking, debt and Risk

Filters

Exam 5: Tests of Trade Models: the Leontief Paradox and Its Aftermath

Most theories of comparative advantage explain trade patterns due to international differences in

Compare and contrast the predictions of the Heckscher-Ohlin and classical models about likely trading partners of various countries with the predictions of the Linder hypothesis.

A possible reconciliation of the Leontief Paradox is that the United States has high tariffs on capital intensive goods and low tariffs on labor intensive goods.

Leontief reconciled his results by arguing that

Intraindustry trade is most common in the trade patterns of

Leontief found that

MacDougall showed in his tests that

MacDougall's test provides evidence that exports are positively related to labor productivity.

Tests of the Heckscher-Ohlin model by Bowen,Leamer,and Sveikauskas and by Maskus continue to

According to the human skills theory

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

The finding that U.S.exports tend to come from labor-intensive industries,while U.S.imports are produced using relatively capital intensive techniques is known as

If one allows natural resources to be a factor of production,then it is possible to explain the Leontief Paradox for the United States on the grounds that U.S.imports are natural resource intensive.

MacDougall's results can be interpreted as

As of 2004,the U.S.,Canada,and Western Europe account for 60 percent of the world's annual consumption of goods and services while having only about 11 percent of the world's population.

If output more than doubles when all inputs are doubled,production is said to occur under conditions of

If some industries exhibit increasing returns to scale in each country,we should not expect to see

The product life cycle model says that comparative advantage in manufactured goods may move from one country to another as a product becomes more standardized.

According to the product life cycle model,comparative advantage

Does the presence in the real world of intraindustry trade prove or disprove the classical or Heckscher-Ohlin models? Explain.

An Introduction to International Trade

Tools of Analysis for International Trade Models

The Classical Model of International Trade

The Heckscher-Ohlin Model

Tariffs

Nontariff Barriers and Arguments for Protection

Commercial Policy: History and Practice

Preferential Trade Agreements

International Trade and Economic Growth

The Balance of Payments

The Foreign Exchange Market

International Monetary Systems

Exchange Rates in the Short Run

Exchange Rates in the Long Run

Theories of the Current Account Balance

Open Economy Macroeconomics

International Banking, debt and Risk

Filters