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

Related Mcqs:

1. 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

2. The Heckshcer-Ohl assumes that are indentical between countries?

   A. tastes and preferences
   B. technology levels
   C. factor indowments
   D. Both A and B

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

   A. Devote excessive amounts of resources to agricultural production
   B. Devote insufficient amounts of resources to agricultural production
   C. Export products that are land-intensive
   D. Import products that are land-intensive

4. When free trade areas are set up the member countries trade with each other grows faster than their trade with other countries This is due to what economist call ?

   A. trade diversion
   B. trade channeling
   C. trade creation and trade diversion
   D. trade creation

5. 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)

6. 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

7. 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

8. 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

9. The Keynesian model is a good guide to ____ behavior and the classical model describes behavior in ______?

   A. long run, short run
   B. flexible imperfect markets
   C. short-term long run
   D. long run, imperfect markets

10. In the classical model of Ricardo, the direction of trade is determined by ?

    A. Absolute advantage
    B. Comparative advantage
    C. Physical advantage
    D. Which way the wind blows