Describe some of the problems in testing the Heckscher-Ohlin theory
What will be an ideal response?
Leontief's test was incomplete because he did not have data on national factor endowments. He only looked at the relationship between factor intensities and trade flows. Recent tests by Maskus and Bowen, Leamer, and Sveikauskas incorporate factor endowments and still find evidence against the theory. However, their findings are based on assumptions about national technologies that may be incorrect. Moreover, data on factor endowments may not be very accurate.
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Using the data in the above table, the average total cost of producing 16 units per day is
A) $1.25. B) $6.25. C) $7.00 D) $7.50.
The Social Security tax is considered to be a
A) regressive tax. B) progressive tax. C) proportional tax. D) marginal tax.
The _____ tend to have a smaller public sector relative to the total economy
a. socialist economies b. centrally planned economies c. autocratic economies d. market economies e. mercantilist economies
What effect on taxes from immigration did the Rand corporation find?
a. A positive effect at the federal level and at the state and local level b. A negative effect at the federal level and at the state and local level c. positive effect at the federal level and a negative effect at the state and local level d. A negative effect at the federal level and a positive effect at the state and local level