Which of the following is false?
A) International differences in tastes, if sufficiently large, could overturn the comparative advantage predictions of the HO model.
B) The classical and HO models make similar assumptions about international differences in technology.
C) The HO model predicts that some groups will be hurt by international trade.
D) Both the classical and the HO models predict that countries gain from international trade.
B
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What does internalizing an externality refer to?
a) making certain government does not disrupt the internal workings of the market b) making buyers pay the full price for the products they purchase c) making certain that all market transaction benefits go to only buyers and sellers d) making buyers and sellers take into account the external effects of their actions
The short-run price elasticity of demand for airline travel is .05, while the long-run elasticity is 2.36 . This means that a significant increase in airline ticket prices will cause airline companies to:
a. collect less revenue from short-notice travelers. b. collect more revenue from travelers who book well in advance. c. lose money on short-notice travelers. d. collect less revenue from travelers who book well in advance. e. lose many of its short-notice travelers.