Which of the following statements is TRUE?
a. The HeckscherOhlin model offers a reasonable explanation of the pattern of trade and the gains from trade.
b. The HeckscherOhlin trade model does not offer an explanation of the pattern of trade.
c. The HeckscherOhlin trade model does not offer an explanation of the gains from trade.
d. The Riparian trade model (with labor as the only input) offers a better explanation of the pattern of trade and the gains from trade than the HeckscherOhlin model.
Ans: a. The HeckscherOhlin model offers a reasonable explanation of the pattern of trade and the gains from trade.
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A monopolistically competitive firm is like a monopoly firm insofar as
A) both face perfectly elastic demand. B) both earn an economic profit in the long run. C) both have MR curves that lie below their demand curves. D) neither is protected by high barriers to entry.
On a production possibilities frontier showing possible output levels of good A and good B, the opportunity cost of producing the first 10 units of A will usually be
a. the same as the opportunity cost of producing the second 10 units of A b. less than the opportunity cost of producing the second 10 units of A c. greater than the opportunity cost of making the second 10 units of A d. 10 units of A e. 10 units of B