Trade theory suggests that Japan would gain from a subsidy the United States provides its grain farmers if the gains to Japanese consumers of wheat products more than offsets the losses to Japanese wheat farmers. This would occur as long as Japan
A) is a net importer in bilateral trade flows with the United States.
B) is a net importer of wheat.
C) has a comparative advantage in wheat.
D) has an absolute advantage in producing wheat.
E) is involved in intra-industry trade with the United States.
Question 2
The assumption of diminishing returns in the Heckscher-Ohlin model means that, unlike in the Ricardian model, it is likely that
A) countries will not be fully specialized in one product.
B) countries will benefit from free international trade.
C) countries will consume outside their production possibility frontier.
D) comparative advantage will not determine the direction of trade.
E) global production will decrease under trade.
The “Big Four” world leaders meet at the Hotel Crillon in Paris, 1919. From left to right (front row
Todaiji temple, Nara, Japan.
Multigroove adjustable pliers are known by many names, including the trade name Channel Locks®.
Japan’s Urban Landscape
Many countries do not produce enough food and need to import food from the United States
GDP per Capita in the United States, 1870–2009