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decrease
labor-intensive
product.
D)
capital-intensive
E)
displace
preexisting
labor.
2)
two
countries
differ
in
tastes
preferences.
military
capabilities.
size
their
economies.
relative
abundance
factors
production.
labor
productivities.
3)
One
way
which
model
differs
Ricardo
comparative
advantage
is
by
assuming
that
________
(are)
identical
all
countries.
factor
endowments
scale
intensities
technology
opportunity
costs
4)
If
a
country
produces
good
Y
(measured
on
vertical
axis)
X
horizontal
axis),
then
absolute
value
slope
its
frontier
equal
to
cost
X.
price
divided
Y.
capital
(assuming
intensive)
5)
The
Ricardian
Comparative
Advantage
former
has
only
products.
frontiers
(one
for
each
country).
varying
wage
rates.
6)
with
will
have
biased
toward
good.
labor;
intensive
land;
capital;
land
7)
8)
kinked
when
there
no
substitution
constant.
are
unemployed
resources.
does
not
engage
trade.
transportation
very
high.
9)
trade
owners
country’s
uses
intensively.
harm;
abundant;
import
benefit;
scarce;
export
10)
According
source
country’s
technology.
endowments.
advertising.
human
capital.
political
system.
11)
export
12)
assumption
diminishing
returns
means
that,
unlike
it
likely
benefit
free
international
be
fully
specialized
one
consume
outside
frontier.
determine
direction
global
under
13)
assumed
terms
available
technologies.
physical
size.
14)
begin
other
prices
diverge.
traded
goods
converge.
benefits
evenly
distributed
between
gain
gain,
but
may
gains
country.
Assume
countries,
A
B,
exist.
15)
Refer
table
above.
S
intensive,
following
Theory,
B
S.
occur
these
16)
you
told
Country
much
richer
than
A,
correct
answer
17)
You
larger
A.
18)
minimum
or
child
laws.
Now
19)
produced
using
as
input.
more
per
unit
output
intensive.
relatively
such
total
greater
50%
cost.
20)
international-trade
equilibrium
rich
charge
less
paid
poor
same
earn
those
21)
different
abundance,
empirically
support
Factor
Price
Equalization
Theorem
Law
Demand
Gravity
22)
23)
predicts
except
within
wages
tend
become
trading
volume
increases
overall
welfare.
24)
Australia
worker,
Belgium
if
began
land-intensive
product
Australia.
Belgium.
diverge
25)
worker,then
real
income
increase.
decline.
landowners
26)
Japan
United
States
rich,
food
two,
formerly
autarkic
result
.
the