chapter4 - probliems

chapter4 - probliems - QUICKQUIZ 1.(a (b (c (d (e

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QUICK QUIZ 1. The magnification effect holds for a factor if (a) that factor is mobile cross industries. (b) that factor is immobile across industries. (c) the other factor is immobile across industries. (d) the other factor is mobile across industries. (e) the price of the good that uses that factor intensively rises. (f) the price of the good that does not use the factor intensively rises. 2. Trends in the United States over the past twenty years have included (a) and (d), but not (b) or (c). 3. The Stolper Samuelson theorem states that
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4. The factor price equalization theorem states that (a) factor mobility will equalize wage rates across countries. (b) factor mobility will equalize the rental rate on capital across countries. (c) unrestricted trade in goods will equalize relative factor prices across countries. (d) trade will equalize only the price of the abundant factor across countries. (e) trade will equalize only the price of the scarce factor across countries. (f) factor prices will equalize across countries even in the absence of trade or factor mobility. 5. In the specific factors model, if a country with a comparative advantage in good X opens trade, in the short run
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