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.Management Sciences
Category: Sources of Comparative Advantage
The Heckscher-Ohlin theorem states that a country will have comparative advantage in the good whose production in relatively intensive in the with which the country is relatively abundant ?
A. tastes
B. technology
C. factor/resource
D. opportunity cost
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 completely in their comparative advantage good
C. reciprocal demand leads to an equilibrium terms of trade by inducing change in both demand and supply
D. All of the above
Intra-industry trade theory ?
A. Explains why the United States might export autos and import clothing
B. Explains why the United States might export and import differentiated versions of the same product such as different types of autos
C. Assumes that transport costs are very low or do not exist
D. ignores seasonal considerations for agricultural goods
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 loans
D. All of the above
Leontief’s result were considered paradoxical because the United Stated was believed to be ?
A. technologically efficient relative to the rest of the world
B. capital abundant relative to the rest of the world
C. labor abundant relative to the rest of the world
D. All of the above
The Heckscher-Ohl in model rules out the classical model’s basis for trade by assuming that _________ is (are) identical between countries?
A. factor endowments
B. factor intensities
C. technology
D. opportunity costs
Assume that Country A is relatively abundant in labor and Country B is relatively abundant in land Note that wages are the returns to labor and rents are the returns to land According to the factor price equalization theorem, once Country A begins specializing according to comparative advantage and trading with Country B: A. wages and rents should fall in Country A B. wages and rents should rise in Country A C. wages should rise and rents should fall in Country A D. wages should fall and rents should raise in Country A ?
XA. wages and rents should fall in Country A
B. wages and rents should rise in Country A
C. wages should rise and rents should fall in Country A
D. wages should fall and rents should raise in Country A
Wassily Leontief used an input output table in order to test the ?
A. Ricardian theory of comparative advantage
B. Heckscher Ohl in theory of comparative advantage
C. Linder theory of overlapping demand
D. All of the above
According to the Heckscher-Ohlin model ?
A. everyone automatically gains from trade
B. The gainers from trade outnumber the losers from trade
C. The scarce factor necessarily gains from trade
D. None of the above
The factor endowment model of international trade was developed by ?
A. Adam Smith
B. David Ricardo
C. John Stuart Mill
D. Eli Heckscher and Bertil Ohlin
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