Question :
71.Which of the following a reason for diminishing rather than : 1299290
71.Which of the following is a reason for diminishing rather than constant returns to specialization?
A. All resources are of the same quality.
B. Resources can shift from the production of one good to another seamlessly.
C. Each country has a fixed stock of resources.
D. Different goods use different resources in different proportions.
E. Trade does not affect the distribution of income within a country.
72.Dynamic gains in both the stock of a country’s resources and the efficiency with which resources are utilized will:
A. cause the country’s production possibility frontier to assume a bell-shaped curve.
B. enable the country to produce more goods than it did before the introduction of free trade.
C. cause the country’s production possibility frontier to shift inward.
D. enable the country to achieve constant returns to specialization.
E. diminish static gains that stagnate economic growth.
73.Which of the following statements best indicates Samuelson’s criticism of free trade?
A. Dynamic gains lead to a universally beneficial outcome for all countries.
B. Offshoring service jobs that were traditionally mobile will increase the market clearing wage rate.
C. Free trade has historically been beneficial only to third world countries.
D. By importing cheap goods from a poor country a rich country may not be able to produce a net gain if the dynamic effect of free trade is to lower real wage rates in the rich country.
E. Trade changes a country’s stock of resources and the efficiency with which it utilizes those resources.
74.One of the rebuttals to Samuelson’s critique of the free trade model is that:
A. the United States’ ability to achieve constant returns to specialization is unparalleled.
B. the strict immigration policies of the United States help insulate the economy from inward migration.
C. introducing trade barriers may in fact be beneficial to developed nations to some extent.
D. developing nations are unlikely to upgrade the skill level of their workforce rapidly enough.
E. the developing nations are unlikely to run into diminishing returns in a near future.
75.Which of the following is true of the relationship between trade and economic growth?
A. Countries open to international trade display higher growth rates than those that close their economies to trade.
B. Within a group of developing countries, closed economies grow faster than open economies.
C. The Leontief paradox notes that adopting an open economy and embracing free trade does not reward a nation with higher economic growth.
D. Free trade hampers economic growth and leads to lower living standards in the long run.
E. Free trade has historically benefited poor counties and hence trade barriers should be introduced to protect rich countries from exploitation.
76.According to the Heckscher-Ohlin theory, the pattern of international trade is determined by differences in _____.
A. labor productivity
B. diminishing returns
C. factor endowments
D. management practices
E. trade barriers
77.Meitneria and Seaboria specialize in the production of heavy machinery and textiles respectively. While Meitneria doesn’t produce textiles, Seaboria is not as technologically advanced as Meitneria. In this situation, according to the Heckscher-Ohlin theory:
A. Meitneria will import textiles from Seaboria and export heavy machinery to it.
B. Meitneria will invest more than Seaboria in the production of textiles to exploit its comparative advantage.
C. Meitneria and Seaboria will raise their trade barriers to protect their economies.
D. Seaboria will recruit experts from Meitneria to specialize in the production of heavy machinery.
E. Meitneria will recruit worksmen from Seaboria to improve its standing in the textile industry.
78.Nations have varying factor endowments, and different factor endowments explain differences in _____.
A. labor productivity
B. the returns obtained from the factors
C. diminishing returns
D. factor costs
E. trade barriers
79.The difference between Ricardo’s theory and the Heckscher-Ohlin theory is that the Heckscher-Ohlin theory:
A. makes more simplifying assumptions.
B. cannot be subjected to empirical tests.
C. actually predicts trade patterns with greater accuracy.
D. argues that the pattern of international trade is determined by differences in national factor endowments.
E. suggests that trade is a positive-sum game in which all countries that participate realize economic gains.
80._____ predicts that countries will export those goods that make intensive use of factors that are locally abundant, while importing goods that make intensive use of factors that are locally scarce.
A. Mercantilism
B. The theory of absolute advantage
C. The Heckscher-Ohlin theory
D. The theory of comparative advantage
E. Samuelson’s critique
