國際經(jīng)濟學(xué)-克魯格曼1-9章題庫(ch1-9)

TESTBANKOFINTERNATIONALECONOMICS

PartⅠ.Fillintheblankwithsuitablecontent.

1.Seventhemesrecurthroughoutthestudyofinternationaleconomics.Theseare,,,thebalanceofpayments,exchangeratedetermination,internationalpolicycoordination,internationalcapitalmarket.

2.Countriesengageininternationaltradefortwobasicreasons:

and.

3.Acountryhasacomparativeadvantageinproducingagoodif

ofproducingthatgoodintermsofothergoodsislowerinthatcountrythanitisinothercountries.

4.Laboristheonlyonefactorofproduction.、and、aretheunitlaborrequirementincheeseandwineatHomeandForeign,respectively.If,Homehasacomparativeadvantageincheese./istherelativepriceofcheese,whenHomeandForeignspecializeinproducingcheeseandwine,respectively.

5.Laboristheonlyonefactorofproduction.、and、aretheunitlaborrequirementincheeseandwineatHomeandForeign,respectively.LandL*areHome’sandForeign’slaborforce.If/</</,theworldrelativesupplyofcheeseequals.Home’sgainsfromindirectlyproducingwinecanbeshownas

6.Inspecificfactorsmodel(QM=QM(K,LM);QF=QF(T,LF);L=LM+LF),ifHomeproducesandtradesmanufacturedgoodsforfood,theoverallcomparisonofthefivechangerateofgoodspriceandfactorprice、、、、insideHomeis.Thatis,therealincomeofcapitalistsincrease,itcanbeshownas.

7.Therearetwomainreasonswhyinternationaltradehasstrongeffectsonthedistributionofincome.First,

Second.

8.IntheHeckscher-Ohlinmodel,Comparativeadvantageisinfluencedbytheinteractionbetweenand

9.Accordingto,iftherelativepriceofagoodrises,therealincomeofthefactorwhichintensivelyusedinthatgoodwillrise,whiletherealincomeoftheotherfactorwillfall.

10.Accordingto,atunchangedrelativegoodsprice,ifthesupplyofafactorofproductionincreases,theoutputofthegoodthatareintensiveinthatfactorwillrise,whiletheoutputoftheothergoodwillfall.

11.Accordingto,ownersofacountry’sabundantfactorsgainfromtrade,butownersofacountry’sscarefactorslose.

12.Accordingto,internationaltradeproducesaconvergenceofrelativegoodsprices.Thisconvergence,inturns,causestheconvergenceoftherelativefactorprices.Tradeleadstocompleteequalizationoffactorprices.

13.Threeassumptionscrucialtothepredictionoffactorpriceequalizationareinrealityuntrue.Theseassumptionsare(1)

(2)(3).

14.“U.S.exportswerelesscapital-intensivethanU.S.imports〞isknownas

.

15.TheRicardianModel,theSpecificFactormodelandtheH-Omodelmaybeviewedasspecialcasesof

16.Thestandardtrademodelderivesaworldrelativesupplycurvefrom

andaworldrelativedemandcurvefrom.

17.Toexport-biasedgrowth,ifthedeclineofthewelfarecausedbythedeteriorationofthetermsoftradeswapovertheriseofthewelfarecausedbygrowth,thegrowthis.

18.Someeconomistsarguedthatexport-biasedgrowthbypoornationswouldworsentheirtermoftradesomuchthattheywouldbeworseoffthaniftheyhadnotgrownatall.Thissituationisknownas.

19.Immiserizinggrowthdemandsstrictconditions,theseconditionsare

,,

.

20.Accordingto“〞,tariffsandexportsubsidiesmighthaveperverseeffectsoninternalprice.

21.Inthemodelof“MonopolisticCompetitionandTrade〞,firmsofanindividualnationfacethetrade-offbetweenand.

22.Marshallarguedthattherewerethreemainreasonswhyaclusteroffirmsmaybemoreefficientthananindividualfirminisolation:,

,

23.Thepatternofintraindustrytradeitselfisunpredicted,

determinethedetailsofthetradepattern.

39.Whenthereisexternaleconomies,thepatternofinternationaltradeisdeterminedby.

24.Theindexesofintrainindustrytradeofaindustrycanbecalculatedbythestandardformula:I=.

25.Interindustrytradeandintrainindustrytradearethesourcesofgainsfromtrade.When、,intrainindustrytradeisthedominantsourceofgainsfromtrade,everyonegainsfromtrade.

26.Theargumentoftemporaryprotectionofindustriestoenablethemtogainexperienceisknownas

27.Ifweaddtogetherthegainsandlossesfromatariff,Wefindthetheneteffectonnationalwelfarecanbeseparatedintotwoparts:and

28.Whydocountriesadopttradepoliciessuchastarifforimportquota,whichproducemorecoststhanbenefits?——

29.Inthepoliticaleconomyoftradepolicy,governmentareassumedtomaximize

ratherthan.

30.Deviationsfromfreetradecansometimesincreasenationalwelfare.Theseargumentsincludeand

31.Accordingto“〞,domesticmarketfailureshouldbecorrectedbydomesticpoliciesaimeddirectlyattheproblem’ssources.

32.Internationaltradeoftenproduceslosersaswellaswinners.Intheactualpoliticsoftradepolicy,incomedistributionisofcrucialimportance.

canexplainwhypoliciesthatnotonlyseemtoproducemorecoststhanbenefitsbutthatalsoseemtohurtfarmorevotersthemtheycanhelpcannonethelessbeadopted.

33.TheWTOincludesfouraspectscontent:GATT1994,GATS,,

34.“Nondiscriminatory〞principlesincludeprincipleand

principle

35.Forpreferentialtradingagreements,suchas,countriesmustcedepartoftheirsovereigntytosupranationalentity.

36.Whetheracustomsunionisdesirableorundesirabledependsonwhetheritlargelyleadstoor.

PartⅡ.TrueorFalse(trueandfalsearedenotedby“T〞and“F〞,respectively)

1.IfaLW*/aLC*<aLW/aLC,Home’srelativeproductivityincheeseishigher.()

2.AccordingtotheRicardianmodel,itispreciselybecausetherelativewageisbetweentherelativeproductivitiesthateachcountryendsupwithacostadvantageinonegood.Thegoodforwhich/>/willbeproducedinForeign.()

3.Itispreciselybecausetherelativewageisbetweentherelativeproductivitiesthateachcountryendsupwithacostadvantageinonegood.()

4.Long-runconvergenceinproductivityproduceslong-runconvergenceinwages.()

5.“Koreanworkersearnonly$2.50anhour;ifweallowKoreatoexportasmuchasitlikestotheUnitedStates,ourworkerswillbeforceddowntothesamelevel.Youcan’timporta$5shirtwithoutimportingthe$2.50wagethatgoeswithit.〞()

6.Thepropositionthattradeisbeneficialisunqualified.Thatis,thereisnorequirementthatacountrybe“competitive〞orthatthetradebe“fair〞.()

7.Freetradeisbeneficialonlyifyourcountryisstrongenoughtostanduptoforeigncompetition.()

8.Foreigncompetitionisunfairandhurtsothercountrieswhenitisbasedonlowwages.()

9.Tradeexploitsacountryandmakeitworseoffifitsworkersreceivemuchlowerwagethanworkersinothernations.()

10.TheRicardianModelpredictsanextremedegreeofspecialization.()

11.TheRicardianModelneglectstheeffectsonincomedistribution.()

12.ThebasicpredictionoftheRicardianmodelhasbeenstronglyconfirmedbyanumberofstudiesoveryears.()

13.TheRicardianModelpredictsthatcountriestendtoexportthosegoodsinwhichtheirproductivityisrelativehigh.()

14.Wecanthinkoffactorspecificityasamatteroftime.()

15.TheopportunitycostofmanufactureintermsoffoodisdenotedbyMPLM/MPLF.()

16.Aequalproportionalchangeinpricehavenorealeffectsontherealwage,realincomeofcapitalownerandlandowner.()

17.Tradebenefitsthefactorthatisspecifictotheimport-competingsectorsofeachcountrybuthurtsthefactortotheexportsectors,withambiguouseffectsonmobilefactors.()

18.Itispossibleinprincipleforacountry’sgovernmenttousetaxesandsubsidiestoredistributeincometogiveeachindividualmoreofbothgoods.()

19.Althoughinternationaltradehasstrongeffectsonincomedistribution,therearestillpossibleinprincipletomakeeachindividualbetteroff.()

20.Typically,thosewhogainfromtradeinanyparticularproductareamuchmoreconcentrated,informed,andorganizedgroupthanthosewholose.()

21.Conflictsofinterestwithinnationsareusuallymoreimportantindeterminingtradepolicythanconflictsofinterestbetweennations.()

22.Generally,economistsdonotregardtheincomedistributioneffectsoftradeasagoodreasontolimittrade.()

23.Theformulationoftradepolicyisakindofpoliticalprocess.()

24.“Theworld’spoorestcountriescan’tfindanythingtoexport.Thereisnoresourcethatisabundant—certainlynotcapitalorland,andinsmallpoornationsnotevenlaborisabundant.〞()

25.WageinequalityinU.S.increasedbetweenthelate1970sandtheearly1990s,economistsattributethechangetothegrowingexportsofmanufacturedgoodsfromNIEs.()

26.Ifthefactor-proportiontheorywasright,acountrywouldalwaysexportfactorsforwhichtheincomeshareexceededthefactorshare,importfactorsforwhichitwasless.()

27.TheH-Omodelcanpredictnotonlythedirectionbutthevolumeoftrade.()

28.FactortradeingeneralturnsouttobemuchsmallerthantheH-Omodelpredicts.()

29.Accordingtoaninfluentialrecentpaper,theH-Omodelcanpredictnotonlythedirectionbutthevolumeoftrade.FactortradeingeneralturnouttobethesameastheH-Omodelpredicts.()

30.OnlybydroppingtheHeckscher-OhlinassumptionthattechnologiesarethesameacrossthecountriescantheoverallpatternofinternationaltradebewellpredictedbytheH-Omodel.()

31.Ifacountrywanttomaximizeitsnationalwelfare,theconsumptionpointiswherethehighestisovaluelineistangenttothehighestreachableindifferencecurve.()

32.Ariseinthetermsoftradeincreasesacountry’swelfare,whileadeclineinthetermsoftradereducesitswelfare.()

33.Export-biasedgrowthtendstoimprovethegrowingcountry’stermsoftradeattherestoftheworld’sexpense.()

34.Ifthetwocountriesallocatetheirchangeinspendinginthesameproportions,therewillnotbeatermsoftradeeffect.()

35.Ifthecountryreceivingatransferspendsahigherproportionofanincreaseincomeonitsexportgoodthanthegiver,atransferraisesworldrelativedemandfortherecipient’sexportgoodandthusimproveitstermsoftrade.()

36.Atransferworsensthedonor’stermsoftradeifthedonorhasahighermariginalpropensitytospendonitsexportgoodthantherecipient.()

37.Atransferimprovesthedonor’stermsoftrade,worsensrecipient’stermsoftrade.()

38.Atransferofincome——sayforeignaid——couldconceivablyleavetherecipientworseoff.()

39.AtariffimprovesHome’stermsoftradeandworsensForeign’s,whileaHomeexportsubsidyworsensHome’stermsoftradeandimproveForeign’s.()

40.Wherethereiseconomiesofscale,thereisimperfectlycompetitivemarketstructure.()

41.Ifintraindustrytradeisthedominantsourceofgainsfromtrade,everyonegainsfromtrade.()

42.Effectonthedistributionofincomewithincountriesoftenweightmoreheavilyonpolicythantermsoftradeconcerns.()

43.Theusualmarketstructureinindustriescharacterizedbyinternaleconomiesofscaleismonopolisticcompetition.()

44.Today,antidumpingmaybeadeviceofprotectionism.()

45.Reciprocaldumpingtendstoincreasethevolumeoftradeingoodsthatarequiteidentical.()

46.Itispossiblethatreciprocaldumpingincreasenationalwelfare.()

47.Strongexternaleconomiestendto“l(fā)ockedin〞theexistingpatternsofinterindustrytrade,evenifthepatternsareruncountertocomparativeadvantage.()

48.Atradingcountrycanconceivablylosefromtradeisprotentiallyjustifyprotectionism.()

49.Likestaticexternaleconomies,dynamicexternaleconomiescanlockinaninitialadvantageinanindustry.()

50.Thestratigictradepolicyisrelatedtothemodelof“Monopolisticcompetition,differentiateproductsandintraindustrytrade〞.()

51.Themodel“Oligopoly,homogeneousproductsandintraindustrytrade〞isfirstdevelopedbyKrugmanandHelpman.()

52.Tradeinfactorsisverymuchliketradeingoods,itoccursformuchthesamereasonsandproducessimilarresults.()

53.Tradeinfactorsisanalternativetotradeingoodsfortheallocationofresources.()

54.Whenacountryborrows,it’sintertemporalPPFisbiasedtowardQP.()

55.TherelativepriceoffutureconsumptiongoodsQPis(1+r).()

56.ThedynamicpathofTNCs’enterforeignmarket：FDI→Export→Licence.()

57.Tariffsmayhaveverydifferenteffectsondifferentstagesofproductionofagood.()

58.Nominaltariffreflectstheeffectiverateofprotection.()

59.Thecostsandbenefitsanalysisofatariffiscorrectifonlythedirectgainstoproducersandconsumersinagivenmarketaccuratelymeasurethesocialgains.()

60.Thecostsandbenefitsanalysisofatariffiscorrectifonlyadollar’sworthofbenefitstoeachgroupisthesame.()

61.AVERisexactlylikeanimportquotawhichthelicenseareassignedtoforeigngovernment.()

62.VERSaremuchmorecostlythantariffs.()

63.Localcontentlawshavebeenwidelyusedbydevelopingcountriestryingtoshifttheirmanufacturingfromassemblybackintointermediategoods.()

64.Apoliticalargumentforfreetradereflectsthefactthatapoliticalcommitmenttofreetrademaybeagoodideainpracticeeventhoughtheremaybebetterpoliciesinprinciple.()

65.Deviationsfromfreetradecansometimesincreasenationalwelfare.()

66.Forasufficientlysmalltariffthetermsoftradegainofsmallcountrymustoutweightheefficiencyloss.()

67.Thedomesticmarketfailureargumentagainstfreetradeisintellectuallyimpeccablebutofdoubtfulusefulness.()

68.“U.S.farmexportsdon’tjustmeanhigherincomesforfarmers—theymeanhigherincomeforeveryonewhosellgoodsandservicestotheU.S.farmsector〞.Thisremarkisapotentialvalidargumentforexportsubsidy.()

69.Mostdeviationsfromfreetradeareadoptednotbecausetheirbenefitexceedtheircostsbutbecausethepublicfailstounderstandtheirtruecosts.()

70.Ifthereismarginalsocialcostsratherthanmarginalsocialbenefits,domesticmarketfailurereinforcethecaseforfreetrade.()

71.TheelectoralcompetitionmodelbelievespoliticalcompetitionwilldrivebothpartiestoproposetariffsclosetotM,thetariffpreferredbythemediumvoter.()

72.Theproblemofcollectiveactioncanbestbeovercomewhenagroupislargeand/orwellorganized.()

73.Tradepolicythatproducemorecoststhanbenefits,hurtmoreconsumersthanproducerscan’tbeadopted.()

74.AsaviolationoftheMFN(“mostfavorednation〞)principle,theWTOforbidspreferentialtradingagreementsingeneral,butallowsthemiftheyleadtofreetradebetweentheagreeingcountries.()

75.Theinfantindustryargumentviolatestheprincipleofcomparativeadvantage()

PartⅢ.ChoosetheONLYonecollectanswerineachquestion.

1.Animportantinsightofinternationaltradetheoryisthatwhencountriesexchangegoodsandservicesonewiththeotherit

isalwaysbeneficialtobothcountries.

isusuallybeneficialtobothcountries.

istypicallybeneficialonlytothelowwagetradepartnercountry.

istypicallyharmfultothetechnologicallylaggingcountry.

tendstocreateunemploymentinbothcountries.

Answer:B

2.Iftherearelargedisparitiesinwagelevelsbetweencountries,then

A.tradeislikelytobeharmfultobothcountries.

B.tradeislikelytobeharmfultothecountrywiththehighwages.

C.tradeislikelytobeharmfultothecountrywiththelowwages.

D.tradeislikelytobeharmfultoneithercountry.

E.tradeislikelytohavenoeffectoneithercountry.

Answer:D

Cost-benefitanalysisofinternationaltrade

isbasicallyuseless.

isempiricallyintractable.

focusesattentiononconflictsofinterestwithincountries.

focusesattentiononconflictsofinterestsbetweencountries.

Noneoftheabove.

Answer:C

4.Aprimaryreasonwhynationsconductinternationaltradeisbecauseofdifferencesin

historicalperspective.

location.

resourceavailabilities.

tastes.

incomes.

Answer:C

5.Argumentsforfreetradearesometimesdisregardedbythepoliticalprocessbecause

economiststendtofavorhighlyprotecteddomesticmarkets.

economistshaveauniversallyaccepteddecisivepoweroverthepoliticaldecisionmechanism.

maximizingconsumerwelfaremaynotbeachiefpriorityforpoliticians.

thegainsoftradeareofparamountconcerntotypicalconsumers.

Noneoftheabove.

Answer:C

Proponentsoffreetradeclaimallofthefollowingasadvantagesexcept

A.relativelyhighwagelevelsforalldomesticworkers.

B.awiderselectionofproductsforconsumers

C.increasedcompetitionforworldproducers.

D.theutilizationofthemostefficientproductionprocesses.

E.Noneoftheabove.

Answer:A

Inordertoknowwhetheracountryhasacomparativeadvantageintheproductionofoneparticularproductweneedinformationonatleast____unitlaborrequirements

one

two

three

four

five

Answer:D

Acountryengagingintradeaccordingtotheprinciplesofcomparativeadvantagegainsfromtradebecauseit

isproducingexportsindirectlymoreefficientlythanitcouldalternatively.

isproducingimportsindirectlymoreefficientlythanitcoulddomestically.

isproducingexportsusingfewerlaborunits.

isproducingimportsindirectlyusingfewerlaborunits.

Noneoftheabove.

Answer:B

AnationengagingintradeaccordingtotheRicardianmodelwillfinditsconsumptionbundle

insideitsproductionpossibilitiesfrontier.

onitsproductionpossibilitiesfrontier.

outsideitsproductionpossibilitiesfrontier.

insideitstrade-partner'sproductionpossibilitiesfrontier.

onitstrade-partner'sproductionpossibilitiesfrontier.

Answer:C

IfaverysmallcountrytradeswithaverylargecountryaccordingtotheRicardianmodel,then

thesmallcountrywillsufferadecreaseineconomicwelfare.

thelargecountrywillsufferadecreaseineconomicwelfare.

thesmallcountrywillenjoygainsfromtrade.

thelargecountrywillenjoygainsfromtrade.

Noneoftheabove.

Answer:C

IftheworldtermsoftradeforacountryaresomewherebetweenthedomesticcostratioofHandthatofF,then

countryHbutnotcountryFwillgainfromtrade.

countryHandcountryFwillbothgainfromtrade.

neithercountryHnorFwillgainfromtrade.

onlythecountrywhosegovernmentsubsidizesitsexportswillgain.

Noneoftheabove.

Answer:B

Ifaproductionpossibilitiesfrontierisbowedout(concavetotheorigin),thenproductionoccursunderconditionsof

constantopportunitycosts.

increasingopportunitycosts.

decreasingopportunitycosts.

infiniteopportunitycosts.

Noneoftheabove.

Answer:B

Iftwocountrieshaveidenticalproductionpossibilityfrontiers,thentradebetweenthemisnotlikelyif

theirsupplycurvesareidentical.

theircostfunctionsareidentical.

theirdemandconditionsidentical.

theirincomesareidentical.

Noneoftheabove.

Answer:E

AssumethatlaboristheonlyfactorofproductionandthatwagesintheUnitedStatesequal$20perhourwhilewagesinJapanare$10perhour.ProductioncostswouldbelowerintheUnitedStatesascomparedtoJapanif

U.S.laborproductivityequaled40unitsperhourandJapan's15unitsperhour.

U.S.productivityequaled30unitsperhourwhereasJapan'swas20.

U.S.laborproductivityequaled20andJapan's30.

U.S.laborproductivityequaled15andJapan's25unitsperhour.

Noneoftheabove.

Answer:A

Internationaltradehasstrongeffectsonincomedistributions.Therefore,internationaltrade

isbeneficialtoeveryoneinbothtradingcountries.

willtendtohurtonetradingcountry.

willtendtohurtsomegroupsineachtradingcountry.

willtendtohurteveryoneinbothcountries.

willbebeneficialtoallthoseengagedininternationaltrade.

Answer:C

Ifthepriceofthecapitalintensiveproductrises,wageswill

risebutbylessthanthepriceofthecapital-intensiveproduct.

risebymorethantheriseinthepriceofthecapital-intensiveproduct.

remainproportionallyequaltothepriceofthecapital-intensiveproduct.

fall,sincehigherpricescauselessdemand.

Noneoftheabove.

Answer:A

IfAustraliahasmorelandperworker,andBelgiumhasmorecapitalperworker,theniftradeweretoopenupbetweenthesetwocountries,

therealincomeofcapitalownersinAustraliawouldrise.

therealincomeoflaborinAustraliawouldclearlyrise.

therealincomeoflaborinBelgiumwouldclearlyrise.

therealincomeoflandownersinBelgiumwouldfall.

therealincomesofcapitalownersinbothcountrieswouldrise.

Answer:D

Ifthepriceofmanufacturesandthepriceoffoodincreaseby25%,then

theeconomymovesdownitsaggregatesupplycurve.

theeconomymovesbackalongitsaggregatedemandcurve.

therelativequantitiesofmanufacturesandfoodremainunchanged.

therelativequantitiesofproductschangeby25%.

Noneoftheabove.

Answer:C

Ifthepriceofmanufacturesrises,then

thepriceoffoodalsorises.

thequantityoffoodproducedfalls.

thequantityofbothmanufacturesandfoodfalls.

thepurchasingpoweroflaborintermsoffoodfalls.

Noneoftheabove.

Answer:B

Groupsthatlosefromtradetendtolobbythegovernmentto

shiftthedirectionofcomparativeadvantage.

abolishtheSpecificFactormodelfrompracticalapplication.

providepublicsupportfortherelativelyefficientsectors.

provideprotectionfortherelativelyinefficientsectors.

Noneoftheabove.

Answer:D

Thespecificfactormodelarguesthatiflandcanbeusedbothforfoodproductionandformanufacturing,thenaquotathatprotectsfoodproductionwill

clearlyhelplandowners.

clearlyhurtlandowners.

clearlyhelpmanufacturebuthurtfoodproduction.

haveanambiguouseffectonthewelfareoflandowners.

Noneoftheabove.

Answer:D

If,relativetoitstradepartners,Gambiniahasmanyworkersbutverylittlelandandevenlessproductivecapital,then,followingthespecificfactormodel,weknowthatGambiniahasacomparativeadvantagein

manufactures.

food.

bothmanufacturesandfood.

neithermanufacturesnorfood.

Noneoftheabove.

Answer:B

Inthe2-factor,2goodHeckscher-Ohlinmodel,aninfluxofworkersfromacrosstheborderwould

movethepointofproductionalongtheproductionpossibilitycurve.

shifttheproductionpossibilitycurveoutward,andincreasetheproductionofbothgoods.

shifttheproductionpossibilitycurveoutwardanddecreasetheproductionofthelabor-intensiveproduct.

shifttheproductionpossibilitycurveoutwardanddecreasetheproductionofthecapital-intensiveproduct.

Noneoftheabove.

Answer:D

The1987studybyBowen,LeamerandSveikauskas

supportedthevalidityoftheLeontieffParadox.

supportedthevalidityoftheHeckscher-Ohlinmodel.

usedatwo-countryandtwo-productframework.

demonstratedthatinfactcountriestendtousedifferenttechnologies.

provedthattheU.S.'scomparativeadvantagereliedonskilledlabor.

Answer:A

TheCaseoftheMissingTraderefersto

the9thvolumeoftheHardyBoys'Mysteryseries.

thefactthatworldexportsdoesnotequalworldimports.

thefactthatfactortradeislessthanpredictedbytheHeckscher-Ohlintheory.

thefactthattheHeckscherOhlintheorypredictsmuchlessvolumeoftradethanactuallyexists.

Noneoftheabove.

Answer:C

OnewayinwhichtheHeckscher-OhlinmodeldiffersfromtheRicardomodelofcomparativeadvantageisbyassumingthat__________is(are)identicalinallcountries.

factorofproductionendowments

scaleeconomies

factorofproductionintensities

technology

opportunitycosts

Answer:D

AsopposedtotheRicardianmodelofcomparativeadvantage,theassumptionofdiminishingreturnsintheHeckscher-Ohlinmodelmeansthattheprobabilityisgreaterthatwithtrade

countrieswillnotbefullyspecializedinoneproduct.

countrieswillbenefitfromfreeinternationaltrade.

countrieswillconsumeoutsidetheirproductionpossibilityfrontier.

comparativeadvantageisprimarilysupplyrelated.

Noneoftheabove.

Answer:A

Supposethattherearetwofactors,capitalandland,andthattheUnitedStatesisrelativelylandendowedwhiletheEuropeanUnionisrelativelycapital-endowed.AccordingtotheHeckscher-Ohlinmodel,

EuropeanlandownersshouldsupportUS-Europeanfreetrade.

EuropeancapitalistsshouldsupportUS-Europeanfreetrade.

allcapitalistsinbothcountriesshouldsupportfreetrade.

alllandownersshouldsupportfreetrade.

Noneoftheabove.

Answer:B

AccordingtotheHeckscher-Ohlinmodel,iftheUnitedStatesisrichlyendowedinhuman-capitalrelativetoMexico,thenasNAFTAincreasinglyleadstomorebilateralfreetradebetweenthetwocountries,

theUnitedStateswillfinditsindustrialbasesuckedintoMexico.

MexicowillfinditsrelativelyhighlyskilledworkersdrawntotheUnitedStates.

ThewagesofhighlyskilledU.S.workerswillbedrawndowntoMexicanlevels.

ThewagesofhighlyskilledMexicanworkerswillrisetothoseintheUnitedStates.

ThewagesofhighlyskilledMexi