Test
IE Chapter 5
Preguntas del test (47)
1In the 2-factor, 2 good Heckscher-Ohlin model, an influx of workers from across the border would
- Amove the point of production along the production possibility curve.
- Bshift the production possibility curve outward; and increase the production of both goods.
- Cshift the production possibility curve outward and decrease the production of the labor-intensive product.
- Dshift the production possibility curve outward and decrease the production of the capital-intensive product.
- Eshift the possibility curve outward and displace preexisting labor.
2In the 2-factor, 2 good Heckscher-Ohlin model, the two countries differ in
- Atastes and preferences.
- Bmilitary capabilities.
- Cthe size of their economies.
- Drelative abundance of factors of production.
- Elabor productivities.
3One way in which the Heckscher-Ohlin model differs from the Ricardo model of comparative advantage is by assuming that ____________ is (are) identical in all countries.
- Afactor endowments
- Bscale of production
- Cfactor intensities
- Dtechnology
- Eopportunity costs
4If 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
- Athe opportunity cost of good X.
- Bthe price of good X divided by the price of good Y.
- Cthe price of good Y divided by the price of good X.
- Dthe opportunity cost of good Y.
- Ethe cost of capital (assuming that good Y is capital intensive) divided by the cost of labor.
5The Heckscher-Ohlin model differs from the Ricardian model of Comparative Advantage in that the former
- Ahas only two countries.
- Bhas only two products.
- Chas two factors of production.
- Dhas two production possibility frontiers (one for each country).
- Ehas varying wage rates.
6In the 2-factor, 2 good Heckscher-Ohlin model, the country with a relative abundance of _______________ will have a production possibility frontier that is biased toward production of the ________________ good.
- Alabor; labor intensive
- Blabor; capital intensive
- Cland; labor intensive
- Dland; capital intensive
- Ecapital; land intensive
7In the 2-factor, 2 good Heckscher-Ohlin model, the country with a relative abundance of _____________ will have a production possibility frontier that is biased toward production of the _________________ good.
- Acapital; capital intensive
- Blabor; capital intensive
- Cland; labor intensive
- Dland; capital intensive
- Elabor; land intensive
8In the 2-factor, 2 good Heckscher-Ohlin model, the production possibility frontier is kinked when
- Athere is no factor substitution in production.
- Bthe opportunity cost of production is constant.
- Cthere are unemployed factor resources.
- Da country does not engage in trade.
- Etransportation costs are very high.
9The assumption of diminishing returns in the Heckscher-Ohlin model means that, unlike in the Ricardian model, it is likely that
- Acountries will not be fully specialized in one product.
- Bcountries will benefit from free international trade.
- Ccountries will consume outside their production possibility frontier.
- Dcomparative advantage will not determine the direction of trade.
- Eglobal production will decrease under trade.
10In the Heckscher-Ohlin model, countries are assumed to differ only in terms of their
- Afactor endowments.
- Btastes and preferences.
- Cavailable technologies.
- Dfactor productivities.
- Ephysical size.
11In the 2-factor, 2 good Heckscher-Ohlin model, trade will _____________ the owners of a country's ________________ factor and will ___________ the good that uses that factor intensively.
- Abenefit; abundant; export
- Bharm; abundant; import
- Cbenefit; scarce; export
- Dbenefit; scarce; import
- Eharm; scarce; export
12According to the Heckscher-Ohlin model, the source of comparative advantage is a country's
- Afactor endowments.
- Btechnology.
- Cadvertising.
- Dhuman capital.
- Epolitical system.
13In the 2-factor, 2 good Heckscher-Ohlin model, trade will ____________ the owners of a country's _______________ factor and will ________________ the good that uses that factor intensively.
- Aharm; scarce; import
- Bharm; abundant; import
- Cbenefit; scarce; export
- Dbenefit; scarce; import
- Eharm; scarce; export
14According to the Heckscher-Ohlin model
- Athe gainers from trade could compensate the losers and still retain gains.
- Beveryone gains from trade.
- Cthe scarce factor gains from trade and the abundant factor loses.
- Da country gains from trade if its exports have a high value added.
- Eonly the country with the more advanced technology gains from trade.
15In the Heckscher-Ohlin model, when two countries begin to trade with each other
- Athe relative prices of traded goods in the two countries converge.
- Brelative factor prices in the two countries diverge.
- Cbenefits from trade are evenly distributed between the two countries.
- Dall factors in both countries will gain from trade.
- Eall factors in one country will gain, but there may be no gains in the other country.
16Assume that only two countries, A and B, exist.
Factor Endowments A B
Labor Force 45 20
Capital Stock 15 10
Refer to the table above. If good S is capital intensive, then following the Heckscher-Ohlin Theory- Acountry B will export good S.
- Bcountry A will export good S.
- Cboth countries will export good S.
- Dtrade will not occur between these two countries.
- Eboth countries will import good S.
17Assume that only two countries, A and B, exist.
Factor Endowments A B
Labor Force 45 20
Capital Stock 15 10
Refer to the table above. If you are told that Country B is very much richer than Country A, then the correct answer is- Acountry B will export good S.
- Bcountry A will export good S.
- Cboth countries will export good S.
- Dtrade will not occur between these two countries.
- Eboth countries will import good S.
18Assume that only two countries, A and B, exist.
Factor Endowments A B
Labor Force 45 20
Capital Stock 15 10
Refer to the table above. You are told that Country B is very much larger than country A. The correct answer is- Acountry B will export good S.
- Bcountry A will export good S.
- Cboth countries will export good S.
- Dtrade will not occur between these two countries.
- Eboth countries will import good S.
19Assume that only two countries, A and B, exist.
Factor Endowments A B
Labor Force 45 20
Capital Stock 15 10
Refer to the table above. You are told that Country B has no minimum wage or child labor laws. Now the correct answer is- Acountry B will export good S.
- Bcountry A will export good S.
- Cboth countries will export good S.
- Dtrade will not occur between these two countries.
- Eboth countries will import good S.
20If a good is labor intensive it means that the good is produced
- Ausing relatively more labor than goods that are not labor intensive.
- Busing labor as the only input.
- Cusing more labor per unit of output than goods that are not labor intensive.
- Dusing labor such that the total cost of labor is greater than the total cost of capital.
- Eusing labor such that the cost of labor is more than 50% of total cost.
21In the Heckscher-Ohlin model, when there is international-trade equilibrium
- Athe relative price of the capital intensive good in the capital rich country will be the same as that in the capital poor country.
- Bthe capital rich country will charge less for the capital intensive good than the price paid by the capital poor country for the capital-intensive good.
- Cthe capital rich country will charge more for the capital intensive good than the price paid by the capital poor country for the capital-intensive good.
- Dworkers in the capital rich country will earn more than those in the poor country.
- Ethe workers in the capital rich country will earn less than those in the poor country.
22If a good is capital intensive it means that the good is produced
- Ausing relatively more capital than goods that are not labor intensive.
- Busing capital as the only input.
- Cusing more capital per unit of output than goods that are not capital intensive.
- Dusing capital such that the total cost of capital is greater than the total cost of labor.
- Eusing capital such that the cost of capital is more than 50% of total cost.
23The Heckscher-Ohlin model predicts all of the following EXCEPT
- Athe volume of trade.
- Bwhich country will export which product.
- Cwhich factor of production within each country will gain from trade.
- Dthat relative wages will tend to become equal in both trading countries.
- Ethat trade increases a country's overall welfare.
24If Australia has relatively more land per worker, and Belgium has relatively more capital per worker, then if trade began between these two countries
- Athe relative price of the land-intensive product would increase in Australia.
- Bthe relative price of the capital-intensive product would increase in Australia.
- Cthe relative price of the land-intensive product would increase in Belgium.
- Dthe relative price of the capital-intensive product would decrease in Belgium.
- Erelative product prices would diverge between Australia and Belgium.
25If Australia has more land per worker, and Belgium has more capital per worker, then if trade began between these two countries
- Athe real income of landowners in Belgium would decline.
- Bthe real income of capital owners in Australia would increase.
- Cthe real income of labor in Australia would decline.
- Dthe real income of labor in Belgium would decline.
- Ethe real income of labor in both countries would decline.
26If Japan is relatively capital rich and the United States is relatively land rich, and if food is relatively land intensive then trade between these two, formerly autarkic countries will result in
- Aan increase in the relative price of food in the U.S.
- Ban increase in the relative price of food in Japan.
- Ca global increase in the relative price of food.
- Da decrease in the relative price of food in both countries.
- Ean increase in the relative price of food in both countries.
27Trade benefits a country by
- Aincreasing available consumption choices.
- Breducing the need for specialization in production.
- Creducing the relative price of the exported good.
- Dincreasing the real income of all resource owners.
- Eincreasing the wage rate.
28If Gambinia has many workers but very little land and even less productive capital, then, following the Heckscher-Ohlin model, we predict that Gambinia will export
- Alabor-intensive goods.
- Bcapital-intensive goods.
- Cboth capital- and land-intensive goods.
- Dland-intensive goods.
- Eboth labor- and land-intensive goods.
29If Gambinia has many workers but very little land and even less productive capital, then, following the Heckscher-Ohlin model, in order to improve the country's economic welfare, the Gambinian government should
- Aengage in free trade.
- Bprotect the capital-intensive product.
- Cprotect the land-intensive product.
- Dprotect the labor-intensive product.
- Ediscontinue all international trade.
30Starting from an autarky (no-trade) situation with Heckscher-Ohlin model, if Country H is relatively labor abundant, then once trade begins
- Awages should rise and rents should fall in H.
- Bwages and rents should rise in H.
- Cwages and rents should fall in H.
- Dwages should fall and rents should rise in H.
- Erent will be unchanged but wages will rise in H.
31Suppose that there are two factors, capital and land, and that the United States is relatively land endowed while the European Union is relatively capital-endowed. According to the Heckscher-Ohlin model
- AEuropean capitalists should support U.S.-European free trade.
- BEuropean landowners should support U.S.-European free trade.
- Call capitalists in both countries should support free trade.
- Dall landowners should support free trade.
- Ethe U.S. should compensate European countries once trade commences.
32International trade has strong effects on income distributions. Therefore, international trade
- Awill tend to hurt some groups in each trading country.
- Bis beneficial to everyone in both trading countries.
- Cwill tend to hurt one trading country.
- Dwill tend to hurt everyone in both countries.
- Ewill be beneficial to all those engaged in international trade.
33Factors tend to be specific to certain uses and products
- Ain the short run.
- Bin countries lacking comparative advantage.
- Cin capital-intensive industries.
- Din labor-intensive industries.
- Ein countries lacking fair labor laws.
34If the price of the capital intensive product rises more than does the price of the land intensive product, then
- Athe relative price of the capital intensive product will fall to some point between the pretrade relative prices.
- Bdemand will shift away from the capital-intensive product, and its production will decrease.
- Cdemand will shift away from the capital-intensive product, and its production will decrease relative to that of the land intensive product.
- Dthe production of the capital-intensive product will decrease, but by less than production of the land-intensive product.
- Ethe country that exports the capital-intensive good will lose its comparative advantage.
35If trade opens up between the two formerly autarkic countries, Australia and Belgium, then
- Athe real income of both countries may increase.
- Bthe real income of Australia and of Belgium will increase.
- Cthe real income of Australia but not of Belgium will increase.
- Dthe real income of neither country will increase.
- Ethe real income of both countries will increase.
36The Leontief Paradox
- Afailed to support the validity of the Heckscher-Ohlin model.
- Bsupported the validity of the Ricardian theory of comparative advantage.
- Csupported the validity of the Heckscher-Ohlin model.
- Dfailed to support the validity of the Ricardian theory.
- Eproved that the U.S. economy is different from all others.
37The Leontief Paradox
- Arefers to the finding that U.S. exports were more labor intensive than its imports.
- Brefers to the finding that U.S. Exports were more capital intensive than its exports.
- Crefers to the finding that the U.S. produces outside its Edgeworth Box.
- Dstill accurately applies to today's pattern of U.S. international trade.
- Erefers to the fact that Leontief—an American economist—had a Russian name.
38The 1987 study by Bowen, Leamer and Sveikauskas
- Asupported the validity of the Leontief Paradox.
- Bsupported the validity of the Heckscher-Ohlin model.
- Cused a two-country and two-product framework.
- Ddemonstrated that in fact countries tend to use different technologies.
- Eproved that the U.S.'s comparative advantage relied on skilled labor.
39Empirical observations on actual North-South trade patterns tend to
- Asupport the validity of the Heckscher-Ohlin model.
- Bsupport the validity of the Leontief Paradox.
- Csupport the validity of the Rybczynski Theorem.
- Dsupport the validity of the wage equalization theorem.
- Esupport the validity of the neo-imperialism exploitation theory.
40The Case of the Missing Trade refers to
- Athe fact that factor trade is less than predicted by the Heckscher-Ohlin theory.
- Bthe 9th volume of the Hardy Boys' Mystery series.
- Cthe fact that world exports does not equal world imports.
- Dthe fact that the Heckscher Ohlin theory predicts much less volume of trade than actually exists.
- Ethe fact that the Heckscher Ohlin theory never applies to China-U.S. trade practices.
41If two countries are very different in relative factor abundance, then empirical support for which of the following would less likely?
- Athe Factor Price Equalization Theorem
- Bthe Heckscher-Ohlin Theorem
- Cthe Law of One Price
- Dthe Law of Demand
- Ethe Gravity Theorem
42Which of the following empirical studies cast the most doubt on the Heckscher-Ohlin model?
- Athe study by Wassily Leontief
- Bthe study by Bowen, Leamer, and Sveikauskas
- Cthe study by David Ricardo
- Dthe study by Adam Smith
- Ethe study by Davis and Weinstein
43Which of the following empirical studies provided the most support for the Heckscher-Ohlin model?
- Athe study by Wassily Leontief
- Bthe study by Bowen, Leamer, and Sveikauskas
- Cthe study by David Ricardo
- Dthe study by Adam Smith
- Ethe study by Davis and Weinstein
44Empirical support for the Hecksher-Ohlin model was weakest when the study applied
- Aall of the assumptions of the model.
- Ball of the assumptions of the model except that regarding technology.
- Call of the assumptions of the model except those regarding technology, goods and shipping costs.
- Dall of the assumptions of the model except those regarding technology, shipping costs and gravity.
- Eall of the assumptions of the model except those regarding shipping costs.
45Which of the following is an assertion of the Heckscher-Ohlin model?
- AThe wage-rental ratio is determined by relative product prices.
- BAn increase in a country's labor supply will increase production of both the capital-intensive and the labor-intensive good.
- CIn the long-run, labor is mobile and capital is not.
- DFactor price equalization will occur only if there is costless mobility of all factors across borders.
- EFactor endowments determine the technology that is available to a country, which determines the good in which the country will have a comparative advantage.
46Which of the following is an assertion of the Heckscher-Ohlin model?
- AThe wage-rental ratio determines the capital-labor ratio in a country's industries.
- BAn increase in a country's labor supply will increase production of both the capital-intensive and the labor-intensive good.
- CIn the long-run, labor is mobile and capital is not.
- DFactor price equalization will occur only if there is costless mobility of all factors across borders.
- EFactor endowments determine the technology that is available to a country, which determines the good in which the country will have a comparative advantage.
47Which of the following is an assertion of the Heckscher-Ohlin model?
- AAn increase in a country's labor supply will increase production of the labor-intensive good and decrease production of the capital-intensive good.
- BAn increase in a country's labor supply will increase production of both the capital-intensive and the labor-intensive good.
- CIn the long-run, labor is mobile and capital is not.
- DFactor price equalization will occur only if there is costless mobility of all factors across borders.
- EFactor endowments determine the technology that is available to a country, which determines the good in which the country will have a comparative advantage.
Información
- Descripción
- Chapter 5
- Autor
- ulckapatel
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- English
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