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Unformatted text preview: in the labor-abundant country and lower wages in the land-abundant
country. 4 FBE 462
Sample Midterm #1 13.
Given the assumptions of the Heckscher-Ohlin model, the opening of trade in a land-abundant
country will cause the domestic price of wheat to:
At first rise but then fall back to its original level. 14.
China is a net importer of:
Shoes and other footwear.
Clothing and accessories. 15.
After the opening of trade, a monopolistically competitive firm which enjoys economies of scale
Get higher prices for its product.
Ultimately earn higher profits.
Get lower prices for its product.
Ultimately go out of business. 16.
Which of the following is the basis for trade in a monopolistically competitive market?
Economies of scale
Constant returns to scale 17.
An oligopoly exists when:
A single firm supplies much of the market.
Many small firms su...
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This note was uploaded on 02/15/2011 for the course FBE 462 at USC.