Which of the following is a critical element of the Heckscher-Ohlin model?
A) That different goods display different factor intensities in their production.
B) That some countries have no comparative advantage in anything.
C) That trade may not be beneficial.
D) All of the above.
A
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An example of a final good is:
A. chocolate chips purchased by Nabisco to make Keebler chocolate chip cookies. B. chocolate chips purchased by you to make chocolate chip cookies. C. chocolate chips purchased by a restaurant to make a chocolate chip cookie pie to sell. D. chocolate used to make Cocoa Rice Krispies.
Suppose an economy is operating at its maximum sustainable output rate. Neither recession nor economic boom are present. Which of the following would be true?
a. The economy would be considered at full employment. b. Actual GDP would exceed potential GDP. c. Actual unemployment will be less than the natural rate of unemployment. d. One hundred percent of the labor force is employed.
The short-run price elasticity of demand for airline travel is 0.05, while the long-run elasticity is 2.36. This means that a significant increase in airline ticket prices will cause airline companies to:
A. collect less revenue from short-notice travelers. B. collect more revenue from travelers who book well in advance. C. lose money on short-notice travelers. D. collect less revenue from travelers who book well in advance.
Effective usury laws:
A. subsidize lenders. B. penalize those who borrow at the below-market interest rate. C. improve efficiency in investing. D. keep some low-income people from obtaining credit and loans.