_______________states that international trade will bring about equalization in the returns to homogeneous factors across countries, even without their physical movement.

Related MCQs

• Assume that Country A is relatively abundant in labor and Country B is relatively abundant in land. Note that wages are the returns to labor and rents are the returns to land. According to the factor price equalization theorem, once Country A begins specializing according to comparative advantage and trading with Country B.
• Trade between two countries can benefit both countries if
• 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:
• ------------theory states that countries which are rich in labour will export labour intensive goods and countries which are rich in capital will export capital intensive goods
• 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?
• The movement to free international trade is most likely to generate short-term unemployment in which industries:
• The movement to free international trade is most likely to generate short-term unemployment in which industries?
• international trade refers to trade between
• Most international trade today is classified as trade in
• In a free trade world in which no restrictions exist, international trade will lead to: