MultiplechoiceCh3

MultiplechoiceCh3 - Chapter 3: Specific Factors and Income...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
1. International trade has strong effects on income distributions. Therefore, international trade A. is beneficial to everyone in both trading countries. B. will tend to hurt one trading country. C. will tend to hurt some groups in each trading country. D. will tend to hurt everyone in both countries. E. will be beneficial to all those engaged in international trade. 2. At the point of production, the production possibility frontier will be tangent to A. the origin. B. a line whose slope is the relative quality of the two goods. C. a line whose slope is the relative quantity of the two goods. D. a line whose slope is the relative price of the two goods. E. None of the above. 3. If the price of the capital intensive product rises more than does the price of the land intensive product, then A. demand will shift away from the capital-intensive product, and its production will decrease. B. demand will shift away from the capital-intensive product, and its production will decrease relative to that of the land intensive product. C. the production of the capital-intensive product will indeed decrease, but not for the reasons mentioned in A or B. D. the countries exporting the capital-intensive good will lose its comparative advantage. E. None of the above. 4. If the price of the capital intensive product rises, wages will A. rise but by less than the price of the capital-intensive product. B. rise by more than the rise in the price of the capital-intensive product. C. remain proportionally equal to the price of the capital-intensive product. D. fall, since higher prices cause less demand. E. None of the above. 5. If Australia has relatively more land per worker, and Belgium has relatively more capital per worker, then if trade were to open up between these two countries, A. the relative price of the capital-intensive product would rise in Australia. B. the world price of the land-intensive product would be higher than it had been in Belgium. C. the world price of the land intensive product would be higher than it had been in Australia. D.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/23/2011 for the course ECON 301 taught by Professor S.chiu during the Spring '11 term at HKU.

Page1 / 5

MultiplechoiceCh3 - Chapter 3: Specific Factors and Income...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online