International Economics: Multiple Choice 1) Factor price equalization occurs in which of the following models? Ricardian...
International Economics: Multiple Choice
1) Factor price equalization occurs in which of the following models?
Ricardian
Specific factors
Heckscher-ohlin
All of the above
2)In which model is the marginal product of labor constant?
Ricardian
Specific factors
Heckscher-ohlin
All of the above
3) If a $10 tariff in a large country increases the domestic price by $6, then the world price will:
Fall by $4
Fall by $6
Increase by $4
Increase by $6
Homework Answers
1. Factor price equalization is an important situation of Hecksher-Ohlin theory of trade. It states that over time, free international trade will lead to the international equalization of the industrial factor prices.
Answer: Hecksher-Ohlin
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(2)
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(1)
If the world price is above the domestic equilibrium price, the
domestic country is likely to ____________________ the good.
(2)
The difference between what an economy sells to and buys from
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(3)
The idea that exchange rates and prices adjust to equalize the
cost of living across international boundaries is called
__________________________.
(4)
In the graph below, when the world price is $3, how many units
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