The theory which predicts that trade occurs because of differences in the availability of factor inputs across countries and the differences in the proportions in which the inputs are used in producing different products is called
A. the Heckscher-Ohlin theory.
B. the theory of comparative advantage.
C. the Stolper-Samuelson theory.
D. the theory of factor price equalization.
Answer: A
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Which of the following is a benefit of affirmative action programs?
A) They ensure that qualified minorities are not being passed over in favor of less-qualified applicants. B) They ensure a fundamental sense of fairness in hiring and promotion. C) They can provide a means and an incentive for members of historically underperforming groups to intentionally change their characteristics, such as investing in education and acquiring experience. D) All of the above are benefits of affirmative action programs.
In a market undergoing technological change, firms that
A) adopt the new technology temporarily incur an economic loss. B) adopt the new technology temporarily make an economic profit. C) do not adopt the new technology temporarily make an economic profit. D) do not adopt the new technology increase their market share. E) do not adopt the new technology continue to make a normal profit.
An example of the principal-agent problem is when
A) managers try to cope with employees that are inefficient. B) proprietors don't receive any money payment for their entrepreneurial skills. C) managers devise penalties that eliminate employee waste. D) managers devise incentives that encourage employees to act in the owner's behalf.
An example of moral hazard is
a. workers working diligently even though the boss is not looking b. health care insured dieting and exercising c. drivers of safer cars turning their phones off before driving d. borrowers investing their loan proceeds differently than the bank requires