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
Related Mcqs:
- 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 - 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) - 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 - 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 - 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 - 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 - 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 - The hypothesis that people know the true model of the economy and that they use this model to form their expectations of the future is the ?
A. Rational-expectations hypothesis
B. Passive-expectations hypothesis
C. adaptive expectations hypothesis
D. lagged-expectations hypothesis. - 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 - 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
