This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Explain how free international trade tends to lead to factor price equalization under the ... (Read 68 times)

@Brianna17

  • Hero Member
  • *****
  • Posts: 550
on: Jun 30, 2018
Explain how free international trade tends to lead to factor price equalization under the assumptions of the HO model. What does this process predict about which groups should be in favor of or opposed to free international trade?
 
  What will be an ideal response?

Question 2

Latin America has more trade agreements than any other region, and it has some of the oldest as well.
 
  Indicate whether the statement is true or false


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

iceage

  • Guest
Reply #1 on: Jun 30, 2018
Answer to Question 1

Free international trade leads in each country to the expansion in the production of that country's comparative advantage good and a contraction in the production of its comparative disadvantage good. At existing commodity prices there will be an excess demand for the country's abundant factor and an excess supply of its scarce factor. This will cause a change in relative prices in both countries moving each toward the other's. In the end, because factors are equally productive across countries (identical technology), prices will be equalized. Therefore, scarce factors should oppose free trade because it lowers their payments, while abundant factors should favor free trade.

Answer to Question 2

TRUE


@Brianna17

  • Member
  • Posts: 550
Reply 2 on: Jun 30, 2018
Great answer, keep it coming :)

Missbam101

  • Member
  • Posts: 341
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

« previous next »
 

Did you know?

The FDA recognizes 118 routes of administration.

Did you know?

People with alcoholism are at a much greater risk of malnutrition than are other people and usually exhibit low levels of most vitamins (especially folic acid). This is because alcohol often takes the place of 50% of their daily intake of calories, with little nutritional value contained in it.

Did you know?

Bacteria have been found alive in a lake buried one half mile under ice in Antarctica.

Did you know?

Excessive alcohol use costs the country approximately $235 billion every year.

Did you know?

Never take aspirin without food because it is likely to irritate your stomach. Never give aspirin to children under age 12. Overdoses of aspirin have the potential to cause deafness.

Saguaro cacti in freeze-free zones. Saguaro cacti in freeze-free zones.
NANDA international two part format NANDA international two part format
Serving unfamiliar foods repeatedly and asking the child to try a bite can lead to gradual ... Serving unfamiliar foods repeatedly and asking the child to try a bite can lead to gradual ...
The striking structural similarity between the translocation factor EF-G (right) and the ternary The striking structural similarity between the translocation factor EF-G (right) and the ternary
An ice-free summer opens the Arctic for exploration An ice-free summer opens the Arctic for exploration
Find the factor demand for labour and the amount of output it will produce. Show all ... Find the factor demand for labour and the amount of output it will produce. Show all ...
Video: Electrocardiogram Examination

For a complete list of videos, visit our video library