The HO model predicts that once trade begins factor prices will equalize between countries. This result occurs because of the assumption of
A) identical technology sets available to each country.
B) constant opportunity costs.
C) one factor of production.
D) free international mobility of factors.
A
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The women's labor force participation rate is
A) higher in Japan than in the United States. B) higher in the United States than in France. C) higher in Italy than in the United States. D) higher in Spain than in Iceland. E) higher in the United States than in Iceland or Norway.
Suppose that Spain has a comparative advantage in hats and Portugal has a comparative advantage in doormats. Under a system of free trade, each country specializes and then trades with the other. If the price starts at four hats per doormat, and then increases to five hats per doormat, then:
a. people in Portugal will not want to buy as many hats. b. Spain no longer has a comparative advantage in hats. c. Portugal is flooding the market with too many doormats. d. some of the gains from trade shift to Portugal. e. some of the gains from trade shift to Spain.
According to experience, what is the most effective solution to highway congestion?
a) to discount transit passes b) to discourage urban sprawl by subsidizing urban apartment rents c) to build more roads d) to set a price for access to roads, which is paid by those who use them
Other things equal, a decrease in the price level will:
A. shift the aggregate supply curve to the left. B. shift the aggregate demand curve to the left. C. cause a movement up a short-run aggregate supply curve. D. cause a movement down an aggregate supply curve.