The Heckscher-Ohlin model predicts all of the following EXCEPT
A) the volume of trade.
B) which country will export which product.
C) which factor of production within each country will gain from trade.
D) that relative wages will tend to become equal in both trading countries.
E) that trade increases a country's overall welfare.
A
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Which of the following will increase the velocity of circulation?
a. Interest rates increase. b. The inflation rate decreases. c. Federal banking legislation abolishes credit cards. d. Employers decide to pay employees once a month instead of once a week.
The following figure shows the production-possibility curves of Canada (AB) and the rest of the world (CD). The international price ratio faced by the countries is represented by the line P2. I1 and I2 are community indifference curves for Canada and the rest of the world. In the shift from no trade to free trade, cotton production in the world increases by ________ bale(s) and wheat production increases by ________ bushel(s).
A. zero; three B. one; zero C. zero; one D. twenty-four; nineteen
If the economy relies entirely on the market mechanism to answer the WHAT, HOW, and FOR WHOM questions, it tends to
A. Overproduce goods that yield external benefits and overproduce those that generate external costs. B. Underproduce goods that yield external benefits and underproduce those that generate external costs. C. Overproduce goods that yield external benefits and underproduce those that generate external costs. D. Underproduce goods that yield external benefits and overproduce those that generate external costs.
The following table shows the total utility and marginal utility derived from the consumption of scones. The first column of the table represents the number of scones a consumer consumes in a day. The second column of the table presents the total utility derived from that consumption, and the third column shows the marginal utility of each additional scones. The marginal utility of the second scone is _____ units. Table 6.3 Scones Total utility Marginal utility 1 10 - 2 18 - 3. 24 6 4 28 - 5 30 2
a. ?9 b. ?8 c. ?6 d. ?19 e. ?12