Question 1

The Case of the Missing Trade refers to

Accepted Answer

A) the fact that factor trade is less than predicted by the Heckscher-Ohlin theory. 
B) the 9th volume of the Hardy Boys' Mystery series. 
C) the fact that world exports does not equal world imports. 
D) the fact that the Heckscher Ohlin theory predicts much less volume of trade than actually exists. 
E) the fact that the Heckscher Ohlin theory never applies to China-U.S.trade practices. 
A) the fact that factor trade is less than predicted by the Heckscher-Ohlin theory. 
B) the 9th volume of the Hardy Boys' Mystery series. 
C) the fact that world exports does not equal world imports. 
D) the fact that the Heckscher Ohlin theory predicts much less volume of trade than actually exists. 
E) the fact that the Heckscher Ohlin theory never applies to China-U.S.trade practices.

Question 2

International trade leads to complete equalization of factor prices.Discuss.

Accepted Answer

This statement is typically "true ...but

Question 3

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

Accepted Answer

A) the Factor Price Equalization Theorem 
B) the Heckscher-Ohlin Theorem 
C) the Law of One Price 
D) the Law of Demand 
E) the Gravity Theorem 
A) the Factor Price Equalization Theorem 
B) the Heckscher-Ohlin Theorem 
C) the Law of One Price 
D) the Law of Demand 
E) the Gravity Theorem

Question 4

If a country produces good Y (measured on the vertical axis)and good X (measured on the horizontal axis),then the absolute value of the slope of its production possibility frontier is equal to

Accepted Answer

A) the opportunity cost of good X. 
B) the price of good X divided by the price of good Y. 
C) the price of good Y divided by the price of good X. 
D) the opportunity cost of good Y. 
E) the cost of capital (assuming that good Y is capital intensiv
E) divided by the cost of labor. 
A) the opportunity cost of good X. 
B) the price of good X divided by the price of good Y. 
C) the price of good Y divided by the price of good X. 
D) the opportunity cost of good Y. 
E) the cost of capital (assuming that good Y is capital intensiv
E) divided by the cost of labor.

Question 5

One of the commonly used assumptions in deriving the Heckscher-Ohlin model is that tastes are homothetic,or that if the per capita incomes were the same in two countries,the proportions of their expenditures allocated to each product would be the same as it is in the other country.Imagine that this assumption is false,and that in fact,the tastes in each country are strongly biased in favor of the product in which it has a comparative advantage.How would this affect the relationship between relative factor abundance between the two countries,and the nature (factor-intensity)of the product each exports? What if the taste bias favored the imported good?

Accepted Answer

If in fact national tastes were strongly

Question 6

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

Accepted Answer

A) the real income of landowners in Belgium would decline. 
B) the real income of capital owners in Australia would increase. 
C) the real income of labor in Australia would decline. 
D) the real income of labor in Belgium would decline. 
E) the real income of labor in both countries would decline. 
A) the real income of landowners in Belgium would decline. 
B) the real income of capital owners in Australia would increase. 
C) the real income of labor in Australia would decline. 
D) the real income of labor in Belgium would decline. 
E) the real income of labor in both countries would decline.

The Case of the Missing Trade refers to

International trade leads to complete equalization of factor prices.Discuss.

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

If a country produces good Y (measured on the vertical axis)and good X (measured on the horizontal axis),then the absolute value of the slope of its production possibility frontier is equal to

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

Introduction

World Trade: An Overview

Labor Productivity and Comparative Advantage: The Ricardian Model

Specific Factors and Income Distribution

The Standard Trade Model

External Economies of Scale and the International Location of Production

Firms in the Global Economy: Export Decisions, Outsourcing, and Multinational Enterprises

The Instruments of Trade Policy

The Political Economy of Trade Policy

Trade Policy in Developing Countries

Controversies in Trade Policy

National Income Accounting and the Balance of Payments

Exchange Rates and the Foreign Exchange Market: An Asset Approach

Money,Interest Rates, and Exchange Rates

Price Levels and the Exchange Rate in the Long Run

Output and the Exchange Rate in the Short Run

Fixed Exchange Rates and Foreign Exchange Intervention

International Monetary Systems: An Historical Overview

Financial Globalization: Opportunity and Crisis

Optimum Currency Areas and the Euro

Developing Countries: Growth, Crisis, and Reform

Filters

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

The Case of the Missing Trade refers to

International trade leads to complete equalization of factor prices.Discuss.

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

If a country produces good Y (measured on the vertical axis)and good X (measured on the horizontal axis),then the absolute value of the slope of its production possibility frontier is equal to

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

Introduction

World Trade: An Overview

Labor Productivity and Comparative Advantage: The Ricardian Model

Specific Factors and Income Distribution

The Standard Trade Model

External Economies of Scale and the International Location of Production

Firms in the Global Economy: Export Decisions, Outsourcing, and Multinational Enterprises

The Instruments of Trade Policy

The Political Economy of Trade Policy

Trade Policy in Developing Countries

Controversies in Trade Policy

National Income Accounting and the Balance of Payments

Exchange Rates and the Foreign Exchange Market: An Asset Approach

Money,Interest Rates, and Exchange Rates

Price Levels and the Exchange Rate in the Long Run

Output and the Exchange Rate in the Short Run

Fixed Exchange Rates and Foreign Exchange Intervention

International Monetary Systems: An Historical Overview

Financial Globalization: Opportunity and Crisis

Optimum Currency Areas and the Euro

Developing Countries: Growth, Crisis, and Reform

Filters