The central prediction of the Hecksher-Ohlin theorem is that
a) international goods prices equalize under foreign trade
b) comparative advantages depend on the abundance of factor inputs
c) international trade disperses technology, speeding convergence
d) all nations move beyond their production possibilities sets with free trade
e) exchange rates adjust to ensure purchasing power parity
b) comparative advantages depend on the abundance of factor inputs
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A major reason that firms form a cartel is to
A. enlarge the market share for each producer. B. maximize joint profits. C. reduce the elasticity of demand for the product. D. minimize the costs of production.
Refer to the figure above. What is the consumer surplus after Barylia opens up to free trade?
A) $75 B) $90 C) $100 D) $125
Which of the following is likely to cause a fall in the wage rate and an increase in the number of workers hired in a local cotton mill?
A) A reduction in wage paid in a nearby jute mill B) The introduction of labor-saving technology in the mill C) The introduction of labor-complementary technology in the mill D) A decrease in the population of the region in which the cotton mill is located
In a typical graph for a purely competitive firm, the intersection of the total cost and total revenue curves would be:
A. a break-even point. B. a point of maximum economic profit. C. a point where MR = MC. D. a point of minimum economic loss.