1、Chapter 4 Resources and Trade: The Heckscher-Ohlin Model Multiple Choice Questions1. In the 2-factor, 2 good Heckscher-Ohlin model, an influx of workers from across the border would(a) move the point of production along the production possibility curve.(b) shift the production possibility curve outw
2、ard, and increase the production of both goods.(c) shift the production possibility curve outward and decrease the production of the labor-intensive product.(d) shift the production possibility curve outward and decrease the production of the capital-intensive product.(e) None of the above.Answer: D
3、2. In the 2-factor, 2 good Heckscher-Ohlin model, the two countries differ in(a) tastes.(b) military capabilities.(c) size.(d) relative availabilities of factors of production.(e) labor productivities.Answer: D3. In the 2-factor, 2 good Heckscher-Ohlin model, a change from autarky (no trade) to trad
4、e will benefit the owners of(a) capital.(b) the relatively abundant factor of production.(c) the relatively scarce factor of production.(d) the relatively inelastic factor of production.(e) the factor of production with the largest elasticity of substitution.Answer: B4. In the 2-factor, 2 good Hecks
5、cher-Ohlin model, a change from autarky (no trade) to trade(a) will tend to make the wages in both countries more similar.(b) will equalize the wages in both countries.(c) will tend to make the wages in both countries less similar.(d) will tend to make wages equal to returns to capital.(e) will tend
6、 to make rents equal to interest rates.Answer: AChapter 4 Resources and Trade: The Heckscher-Ohlin Model 335. The Leontieff Paradox(a) supported the validity of the Ricardian theory of comparative advantage.(b) supported the validity of the Heckscher-Ohlin model.(c) failed to support the validity of
7、 the Ricardian theory.(d) failed to support the validity of the Heckscher-Ohlin model.(e) proved that the U.S. economy is different from all others.Answer: D6. The Leontieff Paradox(a) refers to the finding that U.S. exports were more labor intensive than its imports.(b) refers to the finding that U
8、.S. Exports were more capital intensive than its exports.(c) refers to the finding that the U.S. produces outside its Edgeworth Box.(d) still accurately applies to todays pattern of U.S. international trade.(e) refers to the fact that Leontieffan American economisthad a Russian name.Answer: A7. The
9、1987 study by Bowen, Leamer and Sveikauskas(a) supported the validity of the Leontieff Paradox.(b) supported the validity of the Heckscher-Ohlin model.(c) used a two-country and two-product framework.(d) demonstrated that in fact countries tend to use different technologies.(e) proved that the U.S.s
10、 comparative advantage relied on skilled labor.Answer: A8. Empirical observations on actual North-South trade patterns tend to(a) support the validity of the Leontieff Paradox.(b) support the validity of the Heckscher-Ohlin model.(c) support the validity of the Rybczynski Theorem.(d) support the val
11、idity of the wage equalization theorem.(e) support the validity of the neo-imperialism exploitation theory.Answer: B9. The Case of the Missing Trade refers to(a) the 9th volume of the Hardy Boys Mystery series.(b) the fact that world exports does not equal world imports.(c) the fact that factor trad
12、e is less than predicted by the Heckscher-Ohlin theory.(d) the fact that the Heckscher Ohlin theory predicts much less volume of trade than actually exists.(e) None of the above.Answer: C34 Krugman/Obstfeld Seventh Edition10. If the Unted States had relatively more capital per worker than Mexico, an
13、d if the Leontieff Paradox applied to this trade, then a successful expansion of trade under NAFTA between Mexico and the United States would tend to benefit which group in the United States?(a) Environmentalists(b) Capitalists(c) Workers(d) Land owners(e) Skilled labor with relatively high levels o
14、f human capitalAnswer: C11. According to the Heckscher-Ohlin model, the source of comparative advantage is a countrys(a) technology.(b) advertising.(c) human capital.(d) factor endowments.(e) Both (a) and (b).Answer: D12. The Hechscher-Ohlin model states that a country will have a comparative advant
15、age in the good or service whose production is relatively intensive in the _ with which the country is relatively abundant.(a) tastes(b) technology(c) factor of production(d) opportunity cost(e) scale economyAnswer: C13. One way in which the Heckscher-Ohlin model differs from the Ricardo model of co
16、mparative advantage is by assuming that _ is (are) identical in all countries.(a) factor of production endowments(b) scale economies(c) factor of production intensities(d) technology(e) opportunity costsAnswer: D14. According to the Hecksher-Ohlin model,(a) everyone automatically gains from trade(b)
17、 the scarce factor necessarily gains from trade(c) the gainers could compensate the losers and still retain gains.(d) a country gains if its exports have a high value added.(e) None of the above.Answer: CChapter 4 Resources and Trade: The Heckscher-Ohlin Model 3515. The Heckscher-Ohlin model assumes
18、 that _ are identical in all trading countries(a) tastes(b) technologies(c) factor endowments(d) Both (a) and (b).(e) None of the above.Answer: B16. As opposed to the Ricardian model of comparative advantage, the assumption of diminishing returns in the Heckscher-Ohlin model means that the probabili
19、ty is greater that with trade(a) countries will not be fully specialized in one product.(b) countries will benefit from free international trade.(c) countries will consume outside their production possibility frontier.(d) comparative advantage is primarily supply related.(e) None of the above.Answer
20、: A17. Starting from an autarky (no-trade) situation with Heckscher-Ohlin model, if Country H is relatively labor abundant, then once trade begins(a) wages and rents should rise in H(b) wages and rents should fall in H(c) wages should rise and rents should fall in H.(d) wages should fall and rents s
21、hould rise in H.(e) None of the above.Answer: C18. Which of the following is false (for the Heckscher-Ohlin model)?(a) If tastes are not identical in both countries, wages may still equalize.(b) Differences in technologies could be the source of gains from trade.(c) Some groups may gain and some may
22、 lose due to trade.(d) Gains for the trade-related winners will tend to be larger than losses of losers.(e) None of the above.Answer: B19. If tastes differed between countries, this could affect(a) wage equalization due to trade with no specialization.(b) the direction of trade (who exports what to
23、whom).(c) the fact that some groups in a country might lose welfare due to trade.(d) the fact that the country as a whole will gain from trade.(e) None of the above.Answer: B36 Krugman/Obstfeld Seventh Edition20. Suppose that there are two factors, capital and land, and that the United States is rel
24、atively land endowed while the European Union is relatively capital-endowed. According to the Heckscher-Ohlin model,(a) European landowners should support U.S.-European free trade.(b) European capitalists should support U.S.-European free trade.(c) all capitalists in both countries should support fr
25、ee trade.(d) all landowners should support free trade.(e) None of the above.Answer: B21. According to the Heckscher-Ohlin model, if the United States is richly endowed in human-capital relative to Mexico, then as NAFTA increasingly leads to more bilateral free trade between the two countries,(a) the
26、 United States will find its industrial base sucked into Mexico.(b) Mexico will find its relatively highly skilled workers drawn to the United States.(c) The wages of highly skilled U.S. workers will be drawn down to Mexican levels.(d) The wages of highly skilled Mexican workers will rise to those i
27、n the United States.(e) The wages of highly skilled Mexican workers will fall to those in the United States.Answer: E22. Assume that only two countries, A and B, exist.Consider the following data:CountriesFactor Endowments A BLabor Force 45 20Capital Stock 15 10If good S is capital intensive, then f
28、ollowing the Heckscher-Ohlin Theory,(a) country A will export good S.(b) country B will export good S.(c) both countries will export good S.(d) trade will not occur between these two countries.(e) Insufficient information is given.Answer: B23. Continuing from Question #22, if you are told that Count
29、ry B is very much richer than Country A, then the correct answer is:(a) country A will export good S.(b) country B will export good S.(c) both countries will export good S.(d) trade will not occur between these two countries.(e) insufficient information is given.Answer: BChapter 4 Resources and Trad
30、e: The Heckscher-Ohlin Model 3724. Continuing from Question #22, you are told that Country B is very much larger than country A. The correct answer is:(a) country A will export good S.(b) country B will export good S.(c) both countries will export good S.(d) trade will not occur between these two co
31、untries.(e) insufficient information is given.Answer: B25. Continuing from Question #22, you are told that Country B has no minimum wage or child labor laws. Now the correct answer is:(a) country A will export good S.(b) country B will export good S.(c) both countries will export good S.(d) trade wi
32、ll not occur between these two countries.(e) Insufficient information is given.Answer: B26. Continuing from Question #22, you now are told that the labor unions representing the workers in each of the two respective countries are considering lobbying against the opening of international trade betwee
33、n these two countries. Note that workers income is derived solely from wages.(a) This would be a misguided decision from the viewpoint of the workers in both countries, since trade is always better than autarky.(b) This would be a good decision from the viewpoint of workers in Country A since intern
34、ational trade helps the capitalists and hurts the workers.(c) This would be a good decision from the viewpoint of workers in Country B since international trade helps the owners of capital and hurts the workers.(d) This would be a good decision for both unions since trade hurts workers wherever they
35、 live.(e) None of the above.Answer: C27. We are now told that the information given us in Question #22 was not exactly accurate, and that in fact S is relatively capital intensive only when relative wages are high, but becomes relatively labor intensive when relative wages are low. Given this inform
36、ation:(a) country A will export good S.(b) country B will export good S.(c) both countries will export good S.(d) trade will not occur between these two countries.(e) Insufficient information is given.Answer: E38 Krugman/Obstfeld Seventh Edition28. The following are all assumptions that must be acce
37、pted in order to apply the Heckscher-Ohlin Theory, except for one:(a) countries differ in their endowments of factors of production.(b) countries differ in their technologies.(c) there are two factors of production.(d) production is subject to constant returns to scale.(e) one product always require
38、s more machines per worker in its production than does the other product.Answer: B29. In international-trade equilibrium in the Heckscher-Ohlin model,(a) the capital rich country will charge less for the capital intensive good than the price paid by the capital poor country for the capital-intensive
39、 good.(b) the capital rich country will charge the same price for the capital intensive good as that paid for it by the capital poor country.(c) the capital rich country will charge more for the capital intensive good than the price paid by the capital poor country for the capital-intensive good.(d)
40、 the workers in the capital rich country will earn more than those in the poor country.(e) the workers in the capital rich country will earn less than those in the poor country.Answer: B30. If two countries were very different in their relative factor availabilities, then we would not expect which o
41、f the following to be empirically supported?(a) The Heckscher-Ohlin Theorem(b) The Factor Price Equalization Theorem.(c) The Law of One Price(d) The Law of Demand(e) None of the above.Answer: B31. When Country A produces both goods more efficiently than Country B, then(a) country A should produce bo
42、th goods and not trade.(b) country A should specialize in its good of least absolute disadvantage.(c) both countries would benefit from autarky.(d) both countries may not benefit from trade.(e) None of the above.Answer: E32. The minimum information required to determine Country As comparative advant
43、age is(a) the number of hours of labor in the economy of A.(b) ratio of labor inputs for products S and T in A.(c) total available labor, labor required per unit of S, and labor required per unit of T in A.(d) total available labor and the ratio of labor inputs for S and T in A.(e) None of the above
44、.Answer: EChapter 4 Resources and Trade: The Heckscher-Ohlin Model 3933. The slope of a countrys PPF reflects(a) the opportunity cost of product S in terms of product T.(b) the opportunity cost of T in terms of money prices.(c) the opportunity cost of S or T in terms of S.(d) Both (a) and (b).(e) Bo
45、th (a) and (c).Answer: A34. The Heckscher-Ohlin model predicts all of the following except:(a) which country will export which product.(b) which factor of production within each country will gain from trade.(c) the volume of trade.(d) that wages will tend to become equal in both trading countries.(e
46、) None of the above.Answer: C35. The Heckscher-Ohlin model differs from the Ricardian model of Comparative Advantage in that the former(a) has only two countries.(b) has only two products.(c) has two factors of production.(d) has two production possibility frontiers (one for each country).(e) None o
47、f the above.Answer: C36. 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 eve
48、ryone in both countries.(e) will be beneficial to all those engaged in international trade.Answer: C37. Factors tend to be specific to certain uses and products(a) in countries lacking comparative advantage.(b) in the short run.(c) in capital-intensive industries.(d) in labor-intensive industries.(e
49、) in countries lacking fair labor laws.Answer: B40 Krugman/Obstfeld Seventh Edition38. 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)
