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InternationalEconomics,8e（Krugman）
6
Chapter4
Resources,ComparativeAdvantage,andIncomeDistribution
1）
Inthe2-factor,2goodHeckscher-Ohlinmodel,aninfluxofworkersfromacrosstheborderwould
A）
movethepointofproductionalongtheproductionpossibilitycurve.
B）
shifttheproductionpossibilitycurveoutward,andincreasetheproductionofbothgoods.
C）
shifttheproductionpossibilitycurveoutwardanddecreasetheproductionofthelabor-intensiveproduct.
D）
shifttheproductionpossibilitycurveoutwardanddecreasetheproductionofthecapital-intensiveproduct.
E）
Noneoftheabove.
Answer:
D
2）
Inthe2-factor,2goodHeckscher-Ohlinmodel,thetwocountriesdifferin
A）
tastes.
B）
militarycapabilities.
C）
size.
D）
relativeavailabilitiesoffactorsofproduction.
E）
laborproductivities.
Answer:
D
3）
TheHeckscher-OhlinmodeldiffersfromtheRicardianmodelofComparativeAdvantageinthattheformer
A）
hasonlytwocountries.
B）
hasonlytwoproducts.
C）
hastwofactorsofproduction.
D）
hastwoproductionpossibilityfrontiers（oneforeachcountry）.
E）
Noneoftheabove.
Answer:
C
4）
"Agoodcannotbebothland-andlabor-intensive."Discuss.
Answer:
Inatwogood,twofactormodel,suchastheoriginalHeckscher-Ohlinframework,thefactorintensitiesarerelativeintensities.Hence,therelevantstatisticiseitherworkersperacre（oracresperworker）;orwageperrentalunit（orrentalperwage）.Inordertoillustratethelogicofthestatementabove,letusassumethattheproductionofabroomrequires4workersand1acre.Also,letusassumethattheproductionofonebushelofwheatrequires40workersand80acres.Inthiscasetheacresperpersonrequiredtoproduceabroomisonequarter,whereastoproduceabushelofwheatrequires2acresperperson.Thewheatistherefore（relatively）landintensive,andthebroomis（relatively）laborintensive.
5）
"Nocountryisabundantineverything."Discuss.
Answer:
Theconceptofrelative（country）factorabundanceis（likefactorintensities）arelativeconcept.Whenweidentifyacountryasbeingcapitalintensive,wemeanthatithasmorecapitalperworkerthandoestheothercountry.Ifonecountryhasmorecapitalworkerthananother,itisanarithmeticimpossibilitythatitalsohasmoreworkersperunitcapital.
6）
Refertoabovefigure.CanyouguesswhichgroupofproducersinCountryPmightlobbyagainstfreetrade?
Answer:
InCountryP,theownersoftherelativelyscarcefactorofproductionaretheownersofcapital.Theirrelativeandrealincomeswilldecrease,andsotheymaywellattempttolobbyforprotectionism,whichmaypreventthecountryfrommovingtoafreetradeequilibrium.
AnEconomycanproducegood1usinglaborandcapitalandgood2usinglaborandland.Thetotalsupplyoflaboris100units.Giventhesupplyofcapital,theoutputsofthetwogoodsdependsonlaborinputasfollows:
7）
Refertothetableabove.
（a） Graphtheproductionfunctionsforgood1andgood2
（b） Graphtheproductionpossibilityfrontier.Whyisitcurved?
Answer:
Theproductionpossibilityfrontieriscurvedbecauseofthediminishingreturnsassociatedwiththeexpansionofoutputintheshortrunineachofthetwoindustries.
8）
Inthe2-factor,2goodHeckscher-Ohlinmodel,achangefromautarky（notrade）totradewillbenefittheownersof
A）
capital.
B）
therelativelyabundantfactorofproduction.
C）
therelativelyscarcefactorofproduction.
D）
therelativelyinelasticfactorofproduction.
E）
thefactorofproductionwiththelargestelasticityofsubstitution.
Answer:
B
9）
AccordingtotheHeckscher-Ohlinmodel,thesourceofcomparativeadvantageisacountry's
A）
technology.
B）
advertising.
C）
humancapital.
D）
factorendowments.
E）
BothAandB.
Answer:
D
10）
TheHechscher-Ohlinmodelstatesthatacountrywillhaveacomparativeadvantageinthegoodorservicewhoseproductionisrelativelyintensiveinthe________withwhichthecountryisrelativelyabundant.
A）
tastes
B）
technology
C）
factorofproduction
D）
opportunitycost
E）
scaleeconomy
Answer:
C
11）
AccordingtotheHecksher-Ohlinmodel,
A）
everyoneautomaticallygainsfromtrade.
B）
thescarcefactornecessarilygainsfromtrade.
C）
thegainerscouldcompensatethelosersandstillretaingains.
D）
acountrygainsifitsexportshaveahighvalueadded.
E）
Noneoftheabove.
Answer:
C
Assumethatonlytwocountries,AandB,exist.
12）
Refertothetableabove.IfgoodSiscapital
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