E181_Sample_Midterm_1 - NAME TA Midterm Exam Economics 181...

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N A M E T A Midterm Exam Economics 181 PLEASE SHOW YOUR WORK! PUT YOUR NAME AND TA&s NAME ON ALL PAGES 100 Points Total PART I. Short-Answer. (40 points). Please explain your work whenever possible. Each of the following 10 questions is worth 4 points each. 1. True or False? The Heckscher-Ohlin framework implies the following: if the United States is well endowed in capital and labor-scarce, then when the USA opens up to trade and the price of skill- intensive goods rise relative to labor-intensive goods, we shall see (1) an increase in the return to capital relative to labor and (2) all sectors will become more capital-intensive. 2. True or false? Evidence suggests that in the United States, an increase in the supply of skilled labor relative to unskilled labor, which in turn contributes to a fall in inequality. However, other factors, such as globalization and skill-biased technical change, contribute to rising inequality. 3.
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E181_Sample_Midterm_1 - NAME TA Midterm Exam Economics 181...

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