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 ?

Related Mcqs:

1. 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...

2. The comparative advantage comes if each trading partners has a product that will bring a better price in another country than it will at home. Which economist proposed the principle of comparative advantage ?

   A. Adam Smith B. David Ricardo C. David Smith D. Adam Ricardo...

3. The theory that states that a country has a comparative advantage in the production of a product if that country is relatively well endowed with inputs used intensively in the production of that product is the?

   A. Ricardo Malthus theorem B. Heckscher Ohlin theorem C. Lucas-Laffer theorem D. Friedman Samuelson theorem...

4. _____ 1954 study of U.S trade patterns showed that U.S exports were labor-intensive compared with U.S imports, even though the United States was widely regarded as a relatively capital-abundant nation ?

   A. Paul Samuelson’s B. Wolfgang Stolpher’s C. Staffan Linder’s D. Wassily Leontief’s...

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. According to the factor price equalization theorem, the ________ factor should oppose free. trade policies in any given country?

   A. abundant B. scarce C. neither D. can’t tell without more information...

7. Since the supply of undeveloped land is relatively inelastic a tax on undeveloped land would generate ?

   A. a small deadweight loss and the burden of the tax would fall on the renter B. a large deadweight loss and the burden of the tax would fall on the landlora C. a large deadweight loss and the burden of the tax would fall on the renter. D. a small deadweight loss and the...

8. A country has a comparative advantage in the production of a product if the good’s _____ cost in different from the good’s _____ cost in another country ?

   A. resource; resource B. foreign exchange money C. opportunity; opportunity D. money; opportunity...

9. Assume that global recession causes the quantity of tin demanded to decrease by 4 million pounds at each price To maintain the price of tin at the target price you would ?

   A. sell 4 million pounds of tin B. sell 8 million pounds of tin C. buy 4 million pounds of tin D. buy 8 million pounds of tin...

10. Instead, assume that global economic expansion causes the quantity of tin demanded to increase by 4 million pounds at each price To maintain price of tin at the target price you would ?

    A. sell 4 million pounds of tin B. sell 8 million pounds of tin C. buy 4 million pounds of tin D. buy 8 million pounds of tin...