According to the factor endowment model of Heckscher and Ohlin, countries heavily endowed with land will ?

Related Mcqs:

1. According to the Heckscher-Ohlin model the source of comparative advantage is a country’s ?

   A. technology
   B. advertising
   C. factor endowments
   D. both (a) and (c)

2. According to the Heckscher-Ohlin model ?

   A. everyone automatically gains from trade
   B. The gainers from trade outnumber the losers from trade
   C. The scarce factor necessarily gains from trade
   D. None of the above

3. The trade model of the Swedish economies Heckscher and Ohlin maintains that ?

   A. Absolute advantage determines the distribution of the gains from trade
   B. Comparative advantage determines the distribution of the gains from trade
   C. The division of labor is limited by the size of the world market
   D. A country exports goods for which its resource endowments are most suited

4. One of the predictions of the Heckscher-Ohlin model is that ?

   A. countries with different factor endowments but similar technologies and preferences will have a strong basis for trade with each other
   B. countries with tend to specialize but not completely in their comparative advantage good
   C. reciprocal demand leads to an equilibrium terms of trade by inducing change in both demand and supply
   D. All of the above

5. The Heckscher-Ohlin theory explains comparative advantage as the result of differences in countries ?

   A. Economies of large-scale production
   B. Relative abundance of various resources
   C. Relative costs of labor
   D. Research and development expenditures

6. The Heckscher-Ohl in model rules out the classical model’s basis for trade by assuming that _________ is (are) identical between countries?

   A. factor endowments
   B. factor intensities
   C. technology
   D. opportunity costs

7. The Heckscher-Ohlin theorem states that a country will have comparative advantage in the good whose production in relatively intensive in the with which the country is relatively abundant ?

   A. tastes
   B. technology
   C. factor/resource
   D. opportunity cost

8. The factor endowment model of international trade was developed by ?

   A. Adam Smith
   B. David Ricardo
   C. John Stuart Mill
   D. Eli Heckscher and Bertil Ohlin

9. Assume that Country A is relatively abundant in labor and Country B is relatively abundant in land Note that wages are the returns to labor and rents are the returns to land According to the factor price equalization theorem, once Country A begins specializing according to comparative advantage and trading with Country B: A. wages and rents should fall in Country A B. wages and rents should rise in Country A C. wages should rise and rents should fall in Country A D. wages should fall and rents should raise in Country A ?

   XA. wages and rents should fall in Country A
   B. wages and rents should rise in Country A
   C. wages should rise and rents should fall in Country A
   D. wages should fall and rents should raise in Country A

10. The factor endowment theory was pioneered by ?

    A. Adam smith
    B. David Ricardo
    C. Wassily Leontief
    D. Eli Heckscher and Bertil Ohlin