Describe Leontief's paradox.
What will be an ideal response?
POSSIBLE RESPONSE: In 1953, Wassily Leontief tested the Heckscher-Ohlin (H-O) theory that a country will export products whose production requires more of the country's abundant factors and import products whose production relies more on the country's scarce factors. As the United States in 1947 had relatively abundant capital resources and scarce labor resources, Leontief predicted that the results of his test would show that the United States was exporting relatively capital-intensive goods and importing relatively labor-intensive goods. Leontief found that the United States exported commodities that were more labor intensive than capital intensive, contrary to the H-O theory. Leontief's conclusion the United States specialized in labor-intensive rather than capital-intensive goods contradicted the widely accepted view derived from the H-O theory.
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A. firms earns zero profits B. each firm maximizes profits. C. firms charge a price above marginal cost. D. there is no deadweight loss.
As the interest rate increases, what happens to the present value of a future payment? Explain why changes in the interest rate will lead to changes in the quantity of loanable funds demanded and investment spending
When regulations interfere with exchange and limit entry into various businesses and occupations, they will
What will be an ideal response?
On an average, growth in per capita income is associated with a:
A) fall in inequality. B) fall in poverty. C) rise in poverty. D) rise in inequality.