The Heckscher-Ohlin theory predicts that the opening of trade between a land-abundant country and a labor-abundant country should result in
A. higher wages in the labor-abundant country and higher rents in the land-abundant country.
B. higher rents and wages in both countries.
C. lower rents and wages in both countries.
D. higher rents in the labor-abundant country and higher wages in the land-abundant country.
Answer: A
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Although advertising raises the price of a monopolistic competitor's product, it does confer a benefit to consumers. Which of the following is a benefit to consumers?
A) Advertised products tend to be of higher quality so consumers feel special when they consume advertised products. B) Advertising engenders brand loyalty. C) Advertising could provide consumers with useful information about new products and enable them to comparison shop. D) Advertising acts as a barrier to entry.
If people have the same abilities, then
a. they cannot gain from trade. b. they can still gain from trade if they have different tastes. c. they can still gain from trade as long as they specialize in different activities. d. they can still gain from trade only if they are facing different absolute prices.