Hw2 - ECN 162 International Economic Relations Ina...

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1 ECN 162 International Economic Relations University of California - Davis Ina Simonovska Fall 2009 Assignment 2 (Maximum Points: 100) Due Tuesday, October 13, at the beginning of class. Multiple-Choice Questions (Each question is worth 5 points) 1. According to the Heckscher-Ohlin (HO) model the source of comparative advantage is a country's (a) technology. (b) advertising. (c) factor endowments. (d) both (a) and (c). 2. The HO model rules out the Ricardian model's basis for trade by assuming that __________ is (are) identical between countries. (a) factor endowments (b) factor intensities (c) technology (d) opportunity costs 3. If tastes are identical between countries, then comparative advantage is determined by (a) supply conditions only. (b) demand conditions only. (c) supply and demand conditions. (d) can't tell without more information. 4. Suppose that there are two factors, capital and land, and that the United States is relatively capital abundant while Canada is relatively land abundant. According to the HO model,
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Hw2 - ECN 162 International Economic Relations Ina...

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