According to the factor-price equalization theorem, free trade between any two countries equalizes
A. product prices between the countries but not the prices of individual factors of production.
B. average national income per person in the countries.
C. product prices between the countries and factor prices within each country but not between the countries.
D. product prices as well as the prices of individual factors of production between the countries.
Answer: D
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Other things remaining the same, a left shift in the supply curve will lead to:
A) a decrease in the equilibrium price and the equilibrium quantity. B) an increase in the equilibrium price and the equilibrium quantity. C) a decrease in the equilibrium price and an increase in the equilibrium quantity. D) an increase in the equilibrium price and a decrease in the equilibrium quantity.
Most corn produced in the United States is used for animal feed. The demand for corn is inelastic. These facts mean that
A) there are many substitutes for corn in feeding animals. B) there are few substitutes for corn in feeding animals. C) there are no substitutes for corn in feeding animals. D) animals are not buying the corn themselves, so we cannot learn anything from these facts.
"Growth accounting" is concerned with explaining which of the following?
A. sources of unemployment B. sources of interest rate changes C. sources of inflation D. sources of output growth
Constant returns to scale means that long-run:
A. ATC does not change as output increases. B. ATC rises and then falls as output increases. C. ATC decreases as output decreases. D. ATC increases as output increases.