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International econ - Chapter 5 MC quiz - Resources and Trade - The Heckscher-Ohlin Model

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sukicovi's version from 2017-02-07 14:52

Section 1

Question Answer
In the 2-factor, 2 good Heckscher-Ohlin model, an influx of workers from across the border wouldshift the production possibility curve outward and decrease the production of capital intensive products
2) In the 2-factor, 2 good Heckscher-Ohlin model, the two countries differ inrelative abundance of factors of production
One 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.technology
The Heckscher-Ohlin model differs from the Ricardian model of Comparative Advantage in that the former?has two factors of production
In 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.labor; labor intensive
In 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.capital; capital intensive
In the 2-factor, 2 good Heckscher-Ohlin model, the production possibility frontier is kinked when..?there is no factors of substitution in production
The assumption of diminishing returns in the Heckscher-Ohlin model means that, unlike in the Ricardian model, it is likely thatcountries WILL NOT be fully specialized in one product
12) In the Heckscher-Ohlin model, countries are assumed to differ only in terms of their...?factor endowments
1) In 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.) benefit; abundant; export
2) According to the Heckscher-Ohlin model, the source of comparative advantage is a country's...?factor endowment
In 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.A) harm; scarce; import
5) In the Heckscher-Ohlin model, when two countries begin to trade with each otherthe relative prices of traded goods in the two countries converge
10) If a good is labor intensive it means that the good is produced...?using relatively more labor than goods that are not labor intensive
) In the Heckscher-Ohlin model, when there is international-trade equilibrium...?the relative price of the capital intensive good in the capital rich country will be the same as that in the capital poor country
12) If a good is capital intensive it means that the good is produced...?using relatively more capital than goods that are not labor intensive
13) The Heckscher-Ohlin model predicts all of the following EXCEPT(ie What does the model NOT PREDICT?)the volume of trade
17) Trade benefits a country by...?increasing available consumption choices
If 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...?labor-intensive goods
If 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...?engage in free trade
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Section 2

Question Answer
Starting from an autarky (no-trade) situation with Heckscher-Ohlin model, if Country H is relatively labor abundant, then once trade begins...?wages should rise and rents should fall in H
Suppose 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 modelA) European capitalists should support U.S.-European free trade.
32) International trade has strong effects on income distributions. Therefore, international trade...?will tend to hurt some groups in each trading country
33) Factors tend to be specific to certain uses and products in...?the short run
If the price of the capital intensive product rises more than does the price of the land intensive product, then...?the relative price of the capital intensive product will fall to some point between the pretrade relative prices.
If trade opens up between the two formerly autarkic countries, Australia and Belgium, then...? the real income of both countries may increase.
13) If two countries are very different in relative factor abundance, then empirical support for which of the following would less likely?the Factor Price Equalization Theorem
1) Which of the following is an assertion of the Heckscher-Ohlin model?The wage-rental ratio is determined by relative product prices
2) Which of the following is an assertion of the Heckscher-Ohlin model?The wage-rental ratio determines the capital-labor ratio in a country's industries
3) Which of the following is an assertion of the Heckscher-Ohlin model?An increase in a country's labor supply will increase production of the labor-intensive good and decrease production of the capital-intensive good
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