If a commodity is classified as "labor-intensive" at one set of relative factor prices but "capital-intensive" at another set of relative prices, this situation is known as

Related MCQs

• ____________states that at constant commodity prices, an increase in the quantity of one factor increases the production of the commodity intensive in this factor and reduces the output of the other commodity which is intensive in the constant factor.
• When a commodity is produced with low K/L ratio that commodity is ______ intensive commodity
• A situation where one commodity is capital intensive in one country and labour intensive in another country is called
• The amount of commodity a nation is willing to give up to get an additional unit of another commodity and still remain on the same indifference curve is known as
• “Free trade between two countries in H O model will equalize relative factor prices provided there is incomplete specialization.” This is
• The curve that shows howmuch of its import commodity a nation requires in exchange for various quantities of its export commodity is
• Country A and Country B produce computers and Web sites. The unit labor requirements are given in the table below: Computers Web pages Country A 50 1 Country B 100 1 At which of the following relative prices (computers in terms of Web sites) will Country B produce both goods under free trade?
• Country A has 100 units of labor and Country B has 200 units of labor. Both countries produce computers and Web pages. The unit labor requirements are given in the table below: Computers Web pages Country A 50 1 Country B 100 1 Assume free trade exists and that the relative price is such that both countries specialize completely in the industry in which they have a comparative advantage (neither country produces both goods). The supply of computers relative to Web pages will be:
• The H O theory postulates that as a result of trade the differences in factor prices between nations
• If relatively capital-abundant country A opens trade with relatively labor- abundant country B an the trade takes place in accordance with the Heckscher-Ohlin Theorem. What would be the consequence for factor prices (w/r) in the two countries?