CHAPTER 3 - 76 Test Bank for International Economics 9e...

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76 Test Bank for International Economics, 9e CHAPTER 3 SOURCES OF COMPARATIVE ADVANTAGE MULTIPLE-CHOICE QUESTIONS 1. Which of the following suggests that a nation will export the commodity in the production of which a great deal of its relatively abundant and cheap factor is used? a. The Linder theory b. The product life cycle theory c. The MacDougall theory d . The Heckscher-Ohlin theory 2. According to Staffan Linder, trade between two countries tends to be most pronounced when the countries: 3. Which of the following is a long-run theory, emphasizing changes in the trading position of a nation over a number of years? 4. The Leontief paradox questioned the validity of the theory of: 5. Which of the following would least likely apply to the product life cycle theory? a. Calculators and computers b. Coal and crude oil c. Home movie cameras d. Office machinery
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77 Test Bank for International Economics, 9e 6. Classical trade theory emphasized which of the following as an underlying explanation of the basis for trade? 7. Concerning the influence that transportation costs have on the location of industry, which of the following industries has generally attempted to locate production facilities close to resource supplies? 8. Assume that Country A, in the absence of trade, finds itself relatively abundant in labor and relatively scarce in land. The factor endowment theory reasons that with free trade, the internal distribution of national income in Country A will change in favor of: 9. When considering the effects of transportation costs, the conclusions of our trade model must be modified. This is because transportation costs result in: a. Lower trade volume, higher import prices, smaller gains from trade b. Lower trade volume, lower import prices, smaller gains from trade c. Higher trade volume, higher import prices, smaller gains from trade d. Higher trade volume, lower import prices, greater gains from trade
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