International Trade and Specific Factors Model
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CHAPTER 3
16) If the world terms of trade for a country are somewhere between the domestic cost ratio of H and that of F, then
B) country H and country F will both gain from trade.
17) If the world terms of trade equal those of country F, then
A) country H but not country F will gain from trade
18) If the world terms of trade equal those of country H, then
E) country F but not country H will gain from trade
CHAPTER 4
37) In the specific factors model, a 5% increase in the price of food accompanied by a 10% increase in the price of cloth will cause ________ in the welfare of labor, ________ in the welfare of the fixed factor in the production of food, and ________ in the welfare of the fixed factor in the production of cloth.
A) an ambiguous change; a decrease; an increase
38) In the specific factors model, a 5% increase in the price of food accompanied by a 1% increase in the price of cloth will cause ________ in the welfare of labor, ________ in the welfare of the fixed factor in the production of food, and ________ in the welfare of the fixed factor in the production of cloth.
A) an ambiguous change; an increase; a decrease
3) The effect of trade on specialized employees of import-competing industries will be ________ jobs and ________ pay because they are relatively ________.
A) fewer; lower; immobile
4) The effect of trade on specialized employees of exporting industries will be ________ jobs and ________ pay because they are relatively ________.
A) more; higher; immobile
9) U.S. imports of sugar are limited by an import quota that, according to a study updated in 2013, imposed a total cost on American consumers close to $________, or an average cost of ________ per year for every man, woman, and child in the country.
A) $3 billion; $10
10) U.S. imports of sugar are limited by an import quota that, according to a study updated in 2013, imposed a total cost on American consumers close to $________, or an average cost of ________ per year for every job saved in the U.S sugar industry.
D) $3 billion; $1,000,000