Assume a two-country, two-commodity, and two-input model. Let the two countries in this model be the United States and the Rest of the World and the two goods being produced by each of the countries be steel and wheat. The two factors of production used in producing the goods in each country are capital and land. If the United States is capital-abundant and wheat production is land-intensive, the Heckscher-Ohlin model would predict that the Rest of the World would
A. export steel and import wheat.
B. export wheat and import steel.
C. export both the goods to the United States.
D. import both the goods from the United States.
Answer: B
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A) there are more inputs B) firms can produce more output per unit of input C) more output is produced D) employees work extra hours
From the 1960s to the early 1990s, marginal tax rates _____
a. varied, but not in a consistent direction b. steadily declined c. steadily increased d. remained relatively constant
The mangers of Healthy Snacks and Healthy Bars are engaged in a strategic interaction in which their interests are aligned, but there is more than one possible equilibrium. All of the following can help the managers determine the equilibrium outcome except which one?
A) an announcement made by either firm regarding their future plans B) unpredictable strategies C) a focal point D) the Pareto criterion
The existence of wage-related rent
a. is explained by the fact that people have different opportunity costs b. is explained by the fact that some people who work also own land c. indicates that wage rates can be higher than rents d. is a contradiction because workers' incomes derive from labor e. result from the different productivities of workers