According to the factor price equalization theorem, the ________ factor should oppose free. trade policies in any given country? A. abundantB. scarce C. neither D. can’t tell without more information
By adjusting the model of comparative advantage to include transportation costs along with production costs we would expect ? A. The prices of trade goods to be lower than when there are no transportation costs B. specialization to stop when…
Advocates of industrial policy maintain that government should ? A. pursue free trade as a policy that leads to maximum global efficiencyB. grant subsidies to firms offering potential comparative advantage C. provide loans to domestic workers in exporting industries D.…
According to the Heckscher-Ohlin model ? A. everyone automatically gains from tradeB. The gainers from trade outnumber the losers from trade C. The scarce factor necessarily gains from trade D. None of the above
In his empirical test of comparative advantage Wassily Leontief found that ? 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…
The Heckshcer-Ohl assumes that are indentical between countries? A. tastes and preferences B. technology levels C. factor indowmentsD. Both A and B
One of the predictions of the Heckscher-Ohlin model is that ? A. countries with different factor endowments but similar technologies and preferences will have a strong basis for trade with each other B. countries with tend to specialize but not…
If tastes are identical between countries, then comparative advantage is determined by ? A. supply condition only B. demand conditions only C. supply and demand conditions D. can’t tell without more information
Industrial policies intended to foster comparative advantage for domestic industries could result in the implementation of ? A. research and development subsidies B. loan guarantees C. low interest rate loansD. All of the above
The product cycle theory of trade is essentially a ? A. static, short run trade theoryB. dynamic long run trade theory C. zero-sum theory of trade D. negative-sum theory of trade