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Midterm_Practice_Ch4

Midterm_Practice_Ch4 - Chapter 4 Resources and Trade The...

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Chapter 4 Resources and Trade: The Heckscher-Ohlin Model Multiple Choice Questions 1. In the 2-factor, 2 good Heckscher-Ohlin model, an influx of workers from across the border would (a) move the point of production along the production possibility curve. (b) shift the production possibility curve outward, and increase the production of both goods. (c) shift the production possibility curve outward and decrease the production of the labor-intensive product. (d) shift the production possibility curve outward and decrease the production of the capital- intensive product. (e) None of the above. Answer: D 2. In the 2-factor, 2 good Heckscher-Ohlin model, the two countries differ in 3. In the 2-factor, 2 good Heckscher-Ohlin model, a change from autarky (no trade) to trade will benefit the owners of 4. In the 2-factor, 2 good Heckscher-Ohlin model, a change from autarky (no trade) to trade
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5. According to the Heckscher-Ohlin model, the source of comparative advantage is a country’s (a) technology. (b) advertising. (c) human capital. (d) factor endowments. (e) Both (a) and (b). Answer: D 6. The Hechscher-Ohlin model states that a country will have a comparative advantage in the good or service whose production is relatively intensive in the ______ with which the country is relatively abundant. 7. One way in which the Heckscher-Ohlin model differs from the Ricardo model of comparative advantage is by assuming that __________ is (are) identical in all countries.
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