Question 1

The United States argues that Airbus receives government subsidies in Europe, which place them at a disadvantage.Which of the following statements reflects a common oppositional European trade view?

Accepted Answer

A)   "All of our industries receive tax support from the government, not just Airbus."
B)   "Without subsidies, Airbus will cooperate with Russia to build airplanes."
C)   "Although indirect, Boeing also receives subsidies from the United States government."
D)   "If we do not offer subsidies for European-made planes, production will shift to East Asia."E) A) and B)
F) A) and D)

Question 2

Which trade theory predicts that countries with similar preferences and technologies but dissimilar factor endowments will experience potential gains from trade?

Accepted Answer

A)   specific-factors theory
B)   Stolper-Samuelson theorem
C)   Linder's theory
D)   Heckscher-Ohlin theoryE) None of the above
F) A) and B)

Question 3

The Heckscher-Ohlin theory emphasizes the role of consumer demand in the creation of comparative advantage.

Accepted Answer

A) True 
 B)False

Question 4

Although some people may be harmed by international trade, the Heckscher-Ohlin theory asserts that free trade will promote the standard of living for the nation as a whole.

Accepted Answer

A) True 
 B)False

Question 5

According to Ricardian theory, comparative advantage depends on relative differences in labor productivity.

Accepted Answer

A) True 
 B)False

Exam 3: Sources of Comparative Advantage

The United States argues that Airbus receives government subsidies in Europe, which place them at a disadvantage.Which of the following statements reflects a common oppositional European trade view?

Correct Answer
verified

The Heckscher-Ohlin theory emphasizes the role of consumer demand in the creation of comparative advantage.

Correct Answer
verified

According to Ricardian theory, comparative advantage depends on relative differences in labor productivity.

Correct Answer
verified

Which trade theory predicts that countries with similar preferences and technologies but dissimilar factor endowments will experience potential gains from trade?

Correct Answer
verified

Although some people may be harmed by international trade, the Heckscher-Ohlin theory asserts that free trade will promote the standard of living for the nation as a whole.

Correct Answer
verified

Exam 3: Sources of Comparative Advantage

The United States argues that Airbus receives government subsidies in Europe, which place them at a disadvantage.Which of the following statements reflects a common oppositional European trade view?

Correct AnswerverifiedShow Answer

The Heckscher-Ohlin theory emphasizes the role of consumer demand in the creation of comparative advantage.

Correct AnswerverifiedShow Answer

According to Ricardian theory, comparative advantage depends on relative differences in labor productivity.

Correct AnswerverifiedShow Answer

Which trade theory predicts that countries with similar preferences and technologies but dissimilar factor endowments will experience potential gains from trade?

Correct AnswerverifiedShow Answer

Although some people may be harmed by international trade, the Heckscher-Ohlin theory asserts that free trade will promote the standard of living for the nation as a whole.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified