Question 1

Which of the following is true?

Accepted Answer

A) In the HO model complete specialization in the production of exports is a likely outcome of international trade. 
B) In the classical model, complete specialization seldom occurs due to the assumption of increasing opportunity costs. 
C) Complete specialization is more likely if opportunity costs change little as the production point moves closer to either axis. 
D) All of the above are true. 
A) In the HO model complete specialization in the production of exports is a likely outcome of international trade. 
B) In the classical model, complete specialization seldom occurs due to the assumption of increasing opportunity costs. 
C) Complete specialization is more likely if opportunity costs change little as the production point moves closer to either axis. 
D) All of the above are true.

Question 2

According to the Rybczynski theorem,at constant world prices,if a country experiences a gain in its capital stock it will produce

Accepted Answer

A) more of the capital intensive good and less of the labor intensive good. 
B) more of both goods. 
C) less of the capital intensive good and more of the labor intensive good. 
D) less of both goods. 
A) more of the capital intensive good and less of the labor intensive good. 
B) more of both goods. 
C) less of the capital intensive good and more of the labor intensive good. 
D) less of both goods.

Question 3

Answer the question(s)below based on the following diagram of a country that is in international trade equilibrium.
  
-Refer to the figure above.Which of the following is true?

Accepted Answer

A) This country is completely specialized in the production of X. 
B) This country consumes at point F. 
C) The value of this country's consumption equals the value of its production. 
D) None of the above. 
A) This country is completely specialized in the production of X. 
B) This country consumes at point F. 
C) The value of this country's consumption equals the value of its production. 
D) None of the above.

Question 4

Which of the following is a critical element of the Heckscher-Ohlin model?

Accepted Answer

A) That different goods display different factor intensities in their production. 
B) That some countries have no comparative advantage in anything. 
C) That trade may not be beneficial. 
D) All of the above. 
A) That different goods display different factor intensities in their production. 
B) That some countries have no comparative advantage in anything. 
C) That trade may not be beneficial. 
D) All of the above.

Question 5

France is capital abundant and Italy is labor abundant.Shoes are labor intensive and wheat is capital intensive.Draw diagrams to illustrate the pre- and post-trade equilibria for each of the two countries including the production points,the consumption points,the international price,and the volumes of exports and imports for each.Be sure to identify which country has comparative advantage in which good.Which factors gain and which lose when trade is opened between the two countries? Explain carefully.

Accepted Answer

France
 @#IMG-DLM& 
 @#IMG-DLM& 
France has a comparative ad

Question 6

According to the factor price equalization theorem,if country B is labor abundant,then if country B initiates trade with country A

Accepted Answer

A) wages and rents should fall in A. 
B) rents and rents should rise in A. 
C) wages should rise and rents should fall in A. 
D) wages should fall and rents should rise in A. 
A) wages and rents should fall in A. 
B) rents and rents should rise in A. 
C) wages should rise and rents should fall in A. 
D) wages should fall and rents should rise in A.

Which of the following is true?

According to the Rybczynski theorem,at constant world prices,if a country experiences a gain in its capital stock it will produce

Answer the question(s)below based on the following diagram of a country that is in international trade equilibrium. -Refer to the figure above.Which of the following is true?

Which of the following is a critical element of the Heckscher-Ohlin model?

According to the factor price equalization theorem,if country B is labor abundant,then if country B initiates trade with country A

An Introduction to International Trade

Tools of Analysis for International Trade Models

The Classical Model of International Trade

Tests of Trade Models: the Leontief Paradox and Its Aftermath

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 4: The Heckscher-Ohlin Model

Which of the following is true?

According to the Rybczynski theorem,at constant world prices,if a country experiences a gain in its capital stock it will produce

Answer the question(s)below based on the following diagram of a country that is in international trade equilibrium. -Refer to the figure above.Which of the following is true?

Which of the following is a critical element of the Heckscher-Ohlin model?

According to the factor price equalization theorem,if country B is labor abundant,then if country B initiates trade with country A

An Introduction to International Trade

Tools of Analysis for International Trade Models

The Classical Model of International Trade

Tests of Trade Models: the Leontief Paradox and Its Aftermath

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