Question 2 selected answer correct answer assume the

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Question 2 Selected Answer: Correct Answer: Assume the standard trade model with two countries (Alpha and Beta), two goods (food and drink), and two factors of production (land and labor). Further assume that Alpha is relatively labor-abundant and drink is relatively labor- intensive. When trade opens, the price of food will _____ in Alpha and _____ in Beta. Fall; rise Fall; rise Question 3 Selected Answer: Correct Answer: Using the same assumptions presented in Question 2, when trade opens, Beta will export _____ and import ______. Food; drink Food; drink Question 4 Selected Answer: False Correct Answer: False While China's exports are consistent with the predictions of the Heckscher-Ohlin theory, her imports are not. Question 5 Selected Answer: True Trade makes some people absolutely better off and others absolutely worse off in each of the trading countries. However, the gainers and losers in the short run are somewhat different from those in the long run, because more adjustment can occur in the long run.
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