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ECON 321 International Economics Exam 2 Questions and Answers
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ECON 321 International Economics Exam 2 Questions and Answers
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Exam 2 - Internation ECON1. Which of the following statements is true?
The Heckscher–Ohlin trade model does not offer an explanation of the pattern of trade.
The Heckscher–Ohlin model offers a reasonable explanation of the pattern of trade and
the gains from trade.
The Ricardian trade model (with labor as the only input) offers a better explanation of the
pattern of trade and the gains from trade than the Heckscher–Ohlin model.
The Heckscher–Ohlin trade model does not offer an explanation of the gains from trade.
2. The implication of resources being mobile domestically is that:
there is often unemployment.
they lose the chance to become guest workers in other nations.
labor is paid the same wage and capital receives the same rental price in all domestic
industries.
capital and land are often not suited for use in other industries.
Score: 1 of 1
3. The Heckscher–Ohlin Model assumes that:
consumer tastes within each country have no effect on international trade.
consumer tastes are the same in the two countries and invariant with respect to income.
consumer tastes are different in the two countries and invariant with respect to income.
consumer tastes are different in the two countries and have no effect on international
trade.
Score: 0 of 1
4. According to the text, identical technologies are a more reasonable assumption for:
the call center industry.
both the shoe and call center industries.
the shoe industry.
neither the shoe nor call center industry.
Score: 1 of 1
,5. (Figure: Home and Foreign Autarky Equilibria) If shoes are a labor-intensive industry, which nation
is labor abundant?
Home
both Home and Foreign
Foreign
neither Home nor Foreign
Score: 1 of 1
6. (Table: Capital Intensity Across Industries) According to the table, which industry is the most labor
intensive?
primary metal industries
lumber and wood products
apparel and other textile products
, chemicals and allied products
Score: 0 of 1
7. (Figure: A Country's Before and After Trade Equilibria) What happened to the relative price of
shoes in this nation after trade?
The price of shoes did not change—only the quantity.
Shoes were not as desirable after trade.
Shoes became relatively cheaper in terms of computers.
Shoes became relatively more expensive in terms of computers.
Score: 1 of 1
8. Which statement about the Heckscher–Ohlin model is correct?
It offers an explanation of the effects of trade on the returns to capital and labor.
It offers an explanation of the effects of trade on factor abundance.
It does not offer an explanation of the gains from trade.
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