The Stolper–Samuelson theorem indicates that, after a country shifts to free trade: 1- the real return...
The Stolper–Samuelson theorem indicates that, after a country shifts to free trade:
1- the real return to all the resources in an economy will increase.
2- the real return to the factor used intensively in the export industry will fall in the long run.
3- the real return to the factor used intensively in the export industry will rise in the long run.
4- the real return to the factor used intensively in the import-competing industry will rise in the long run.
Homework Answers
Option 2 is correct
According to Stopler-Samuelson theorem, wages fall in the labour abundant country. So real return to the factor used intensively will fall in the long run.
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The Stolper–Samuelson theorem indicates that, after a country
shifts to free trade:
1- the real return...
51. The Stolper-Samuelson theorem suggests that, when a country is opened to international trade, the real income o...
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According to the Stolper-Samuelson theorem, if a country opens up to trade and starts to export...
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International Economics Chapter 5 Problem Set 1. Consider a long-run model for a country producing two...
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51. The Stolper-Samuelson theorem suggests that, when a country is opened to international trade, the real income of the country's abundant factor of production will and the real income of the country's scarce factor of production a. rise; also will rise b. rise; wil fall c. fall; will rise d. fall; also will fall 52 In the "specific-factors" model where capital in each sector is fixed but labor can move freely between the two sectors, the opening of the country...
Part I. Heckscher-Ohlin Model and Stolper-Samuelson theorem Suppose that there are drastic technological improvements in shoe production at Home such that shoe factories can operate almost completely with computer-aided machines. Consider the following data for the Home country 1. Computers: Sales revenue Pc X Qc-100 Payments to labor = w × LC-50 Payments to capital - Kc R 50 Percentage increase in the price-pe_0% Sales revenue Ps X Qs-100 Payments to labor -WxLS-5 Payments to capital -Ks x R 95...
59. The "magnification effect" refers to the fact that, when a country is opened to trade, a. the price of the export good rises. b. real income is magnified even though the PPF does not change. c. the price of the abundant factor rises faster than does the price of the export good. d. the price of the scarce factor rises. 60. In the 2x2x2 Heckscher-Ohlin analysis, if an relatively labor-abundant country is opened to trade, then, as the movement...
Question 40 (2.5 points) Trade occurs because of in the availability of factor inputs across countries and the differences in the proportions of those factors that are used in producing different goods. Trade causes in the export-oriented sector and in the import-competing sector. differences; expansion; contraction similarities; expansion; contraction similarities; contraction; expansion differences; contraction; expansion Question 41 (2.5 points) Use the following information to answer question below Assume the standard trade model with two countries (Alpha and Beta), two goods...
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