Assume the standard trade model with two countries (Alpha and Beta), two goods (food and drink), and two factors of production (land and labor). Further assume that Alpha is relatively labor-abundant and food is relatively land-intensive. According to the Heckscher-Ohlin theory, Beta has a comparative advantage in the production of
A. food.
B. drink.
C. neither good.
D. both goods.
Answer: A
You might also like to view...
If policymakers attempt to offset an adverse inflation shock with monetary ________, the resulting long-run equilibrium will be at ________ inflation rate compared to allowing the self-correcting mechanism return the economy to potential output.
A. easing; a lower B. tightening; a lower C. tightening; a higher D. easing; a higher
The division of labor usually refers to splitting
a. the three coordination decisions among different sets of planners. b. the parts of a complex task among different workers. c. the production of consumption goods and capital goods among different workers. d. political leaders into radical and conservative camps each year.
____________ is the day with the most frequent price drops,
Fill in the blank(s) with the appropriate word(s).
If there are no unexploited opportunities for individuals in a particular market, then one can conclude that:
A. the market is in equilibrium. B. government regulation has been successful. C. a socially optimal outcome has been achieved. D. the market is not in equilibrium.