Question 1

The degree of a factor's specificity is directly related to
A) the amount of time required to redeploy the factor to a different industry.
B) the cost of the factor as a proportion of the long-run total cost of production.
C) the mobility of the factor, with more mobile factors having more specificity.
D) technology differences between two countries, with a more advanced technology resulting in more factor specificity.
E) factor quality, with higher quality factors having a higher level of specificity.

Accepted Answer

The degree of a factor's specificity is related to how easily it can be redeployed to a different industry, which is reflected in the time required for such redeployment. The longer it takes, the more specific the factor is to its current industry.

Question 2

Japan's trade policies with regard to rice reflect the fact that
A) japanese rice farmers have significant political power.
B) Japan has a comparative advantage in rice production and therefore exports most of its rice crop.
C) there would be no gains from trade available to Japan if it engaged in free trade in rice.
D) there are gains from trade that Japan captures by engaging in free trade in rice.
E) Japan imports most of the rice consumed in the country.

Accepted Answer

Japan's trade policies with regard to rice are heavily influenced by the political power of Japanese rice farmers. The government maintains high tariffs on imported rice in order to protect the domestic rice industry, which is important politically. Therefore, the option that reflects this situation is answer choice A.

Question 3

The Ricardian model of international trade demonstrates that trade can be mutually beneficial.Why,then,do governments restrict imports of some goods?
A) Trade can have significant harmful effects on some segments of a country's economy.
B) The Ricardian model is often incorrect in its prediction that trade can be mutually beneficial.
C) Import restrictions are the result of trade wars between hostile countries.
D) Imports are only restricted when foreign-made goods do not meet domestic standards of quality.
E) Restrictions on imports can have significant beneficial effects on domestic consumers.

Accepted Answer

While the Ricardian model demonstrates that trade can be mutually beneficial overall, it may also create winners and losers within a country's economy. Industries that face increased competition from imported goods may suffer job losses or reduced profits, leading to pressure on the government to restrict imports to protect these industries.

Question 4

In the four-quadrant diagram of the specific factors model,the graph in the upper right quadrant is a country's
A) production possibility frontier.
B) labor allocation constraint.
C) production function for food.
D) production function for cloth.
E) labor supply curve.

Accepted Answer

The upper right quadrant of the four-quadrant diagram in the specific factors model typically represents the production possibility frontier (PPF), which shows the maximum possible output combinations of two goods that a country can produce given its resources and technology.

Question 5

A factor of production that cannot be used outside of a particular sector of an economy is a(an)
A) specific factor.
B) mobile factor.
C) variable factor.
D) import-competing factor.
E) export-competing factor.

Accepted Answer

A specific factor is a type of factor of production that is limited to particular sectors of the economy and cannot be shifted or moved to other sectors. This may include resources such as specialized machinery, land, or labor with unique skills.

Question 6

The Ricardian two-country two-good model predicts that there are potential benefits from trade,but NOT
A) the effect of trade on income distribution.
B) the mechanism that determines which country will specialize in which good.
C) when one country has an absolute advantage in the production of both goods.
D) when one country has significantly lower wages than the other country.
E) when both countries have the same types of technology available.

Accepted Answer

The Ricardian model focuses on comparative advantage and does not address income distribution effects.

Question 7

The specific factors model was developed by
A) Paul Samuelson and Ronald Jones.
B) Adam Smith and David Ricardo.
C) Richard Nixon and Robert Kennedy.
D) C.B. deMille and Gordon Willis.
E) Bill Clinton and Monica Lewinsky.

Accepted Answer

The specific factors model was developed by economists Paul Samuelson and Ronald Jones in the 1950s.

Question 8

International trade can have important effects on the distribution of income because
A) different industries employ different factors of production.
B) of government corruption.
C) the more powerful country dictates the terms of trade.
D) rich countries take advantage of poor countries.
E) different countries use different currencies.

Accepted Answer

International trade can affect the distribution of income because different industries may require different factors of production, such as labor or capital. This can lead to shifts in employment and wages, and potentially affect income distribution within a country or between countries. For example, if a developed country specializes in high-tech industries that require skilled workers and capital, while a developing country specializes in labor-intensive industries such as textiles, the developed country may have higher wages and more skilled workers while the developing country may have lower wages and less skilled workers.

Question 9

A worker who has invested in ________ skills will be ________ mobile than would otherwise be the case.
A) occupation-specific; less
B) occupation-specific; more
C) ethical; less
D) ethical; more
E) occupation-nominal; less

Accepted Answer

Occupation-specific skills are tailored to a particular job or industry, making it harder for the worker to transition to different roles or sectors, thus reducing mobility.

Question 10

In the four-quadrant diagram of the specific factors model,the graph in the lower right quadrant is a country's
A) production function for cloth.
B) production possibility frontier.
C) labor allocation constraint.
D) production function for food.
E) labor supply curve.

Accepted Answer

The answer of In the four-quadrant diagram of the specific...

Question 11

In the specific factors model,a country's production possibility frontier is ________ because of ________.
A) a straight line; diminishing marginal returns
B) a curved line; diminishing marginal returns
C) a straight line; constant marginal returns
D) a curved line; constant marginal returns
E) a curved line; a limited supply of labor

Accepted Answer

According to the specific factors model, a country's production possibility frontier is a curved line because of diminishing marginal returns. This is because as more and more of a specific factor (such as labor or capital) is added to production, the marginal product of that factor will eventually begin to decrease, leading to a less efficient use of resources and a curved production possibility frontier.

Question 12

The degree of a factor's specificity is inversely related to
A) the mobility of the factor, with more mobile factors having less specificity.
B) the amount of time required to redeploy the factor to a different industry.
C) the cost of the factor as a proportion of the long-run total cost of production.
D) technology differences between two countries, with a less advanced technology resulting in less factor specificity.
E) factor quality, with lower quality factors having a lower level of specificity.

Accepted Answer

The more mobile a factor is, the less specific it tends to be. For example, labor is a highly mobile factor and therefore less specific, while a specialized machine unique to a particular industry would be highly specific.

Note: The other choices are either unrelated or do not have an inverse relationship with factor specificity, so they are not the best choices.

Question 13

The specific factors model assumes that there are ________ goods and ________ factor(s)of production.
A) two; three
B) two; two
C) two; one
D) three; two
E) four; three

Accepted Answer

The specific factors model assumes there are two goods and three factors of production, where two factors are specific to each industry and one is mobile between them.

Question 14

In the specific factors model,a country's production function is ________ because of ________.
A) a straight line; diminishing marginal returns
B) a curved line; diminishing marginal returns
C) a straight line; constant marginal returns
D) a curved line; constant marginal returns
E) a curved line; a limited supply of labor

Accepted Answer

In the specific factors model, a country's production function is a curved line due to diminishing marginal returns. This occurs as more inputs are added to production, resulting in smaller and smaller increases in output. The specific factors model assumes that there are fixed factors of production, such as land or capital, that cannot be easily transferred between industries, leading to different production functions for each industry. Therefore, the production function is not a straight line, and the correct answer is B.

Question 15

In the specific factors model,which of the following is treated as a specific factor?
A) capital
B) labor
C) cloth
D) food
E) technology

Accepted Answer

The answer of In the specific factors model,which of the...

Question 16

In the specific factors model,which of the following is treated as a specific factor?
A) land
B) labor
C) cloth
D) food
E) technology

Accepted Answer

In the specific factors model, land is considered a specific factor because it is tied to a particular sector, such as agriculture, and cannot be easily moved to another sector.

Question 17

The Ricardian model of international trade demonstrates that trade can be mutually beneficial.Why,then,do governments restrict imports of some goods?
A) Trade can have substantial effects on a country's distribution of income.
B) The Ricardian model is often incorrect in its prediction that trade can be mutually beneficial.
C) Import restrictions are the result of trade wars between hostile countries.
D) Imports are only restricted when foreign-made goods do not meet domestic standards of quality.
E) Restrictions on imports are intended to benefit domestic consumers.

Accepted Answer

While the Ricardian model shows that trade can be mutually beneficial, it does not take into account the distribution of gains within a country. This means that some groups within a country may benefit more from trade than others, leading to political pressure to restrict imports of certain goods that are seen as threatening to specific groups or industries.

Question 18

In the specific factors model,labor is defined as a(an)
A) mobile factor.
B) specific factor.
C) fixed factor.
D) variable factor.
E) intensive factor.

Accepted Answer

In the specific factors model, labor is considered a mobile factor because it can move between different sectors of the economy, unlike specific factors which are tied to a particular sector.

Question 19

International trade can have important effects on the distribution of income because
A) some resources are immobile in the short run.
B) of government corruption.
C) the more powerful country dictates the terms of trade.
D) rich countries take advantage of poor countries.
E) different countries use different currencies.

Accepted Answer

International trade can lead to unequal gains and losses for different factors of production, and some resources may be immobile in the short run, meaning that workers in industries that face import competition may see a decline in demand for their labor and a fall in wages. On the other hand, owners of capital in export-oriented industries may see an increase in demand for their investments and a rise in profits.

Question 20

A factor of production that can be used in any sector of an economy is a(an)
A) mobile factor.
B) specific factor.
C) variable factor.
D) import-competing factor.
E) export-competing factor.

Accepted Answer

A mobile factor is a factor of production that can be easily used in any sector of the economy. It is not specific to any particular industry or sector. Examples of mobile factors include labor, capital, and technology. Specific factors, on the other hand, are factors of production that are specific to a particular industry or sector. Variable factors are those that can be varied in quantity in the short run to affect production levels. Import-competing and export-competing factors are related to international trade and are not relevant to this question.

Quiz 4: Specific Factors and Income Distribution

The degree of a factor's specificity is directly related to

Japan's trade policies with regard to rice reflect the fact that

The Ricardian model of international trade demonstrates that trade can be mutually beneficial.Why,then,do governments restrict imports of some goods?

In the four-quadrant diagram of the specific factors model,the graph in the upper right quadrant is a country's

A factor of production that cannot be used outside of a particular sector of an economy is a(an)

The Ricardian two-country two-good model predicts that there are potential benefits from trade,but NOT

The specific factors model was developed by

International trade can have important effects on the distribution of income because

A worker who has invested in skills will be mobile than would otherwise be the case.

In the four-quadrant diagram of the specific factors model,the graph in the lower right quadrant is a country's

In the specific factors model,a country's production possibility frontier is because of .

The degree of a factor's specificity is inversely related to

The specific factors model assumes that there are goods and factor(s) of production.

In the specific factors model,a country's production function is because of .

In the specific factors model,which of the following is treated as a specific factor?

In the specific factors model,which of the following is treated as a specific factor?

The Ricardian model of international trade demonstrates that trade can be mutually beneficial.Why,then,do governments restrict imports of some goods?

In the specific factors model,labor is defined as a(an)

International trade can have important effects on the distribution of income because

A factor of production that can be used in any sector of an economy is a(an)

Quiz 4: Specific Factors and Income Distribution

The degree of a factor's specificity is directly related to

Japan's trade policies with regard to rice reflect the fact that

The Ricardian model of international trade demonstrates that trade can be mutually beneficial.Why,then,do governments restrict imports of some goods?

In the four-quadrant diagram of the specific factors model,the graph in the upper right quadrant is a country's

A factor of production that cannot be used outside of a particular sector of an economy is a(an)

The Ricardian two-country two-good model predicts that there are potential benefits from trade,but NOT

The specific factors model was developed by

International trade can have important effects on the distribution of income because

A worker who has invested in ________ skills will be ________ mobile than would otherwise be the case.

In the four-quadrant diagram of the specific factors model,the graph in the lower right quadrant is a country's

In the specific factors model,a country's production possibility frontier is ________ because of ________.

The degree of a factor's specificity is inversely related to

The specific factors model assumes that there are ________ goods and ________ factor(s) of production.

In the specific factors model,a country's production function is ________ because of ________.

In the specific factors model,which of the following is treated as a specific factor?

In the specific factors model,which of the following is treated as a specific factor?

The Ricardian model of international trade demonstrates that trade can be mutually beneficial.Why,then,do governments restrict imports of some goods?

In the specific factors model,labor is defined as a(an)

International trade can have important effects on the distribution of income because

A factor of production that can be used in any sector of an economy is a(an)

A worker who has invested in skills will be mobile than would otherwise be the case.

In the specific factors model,a country's production possibility frontier is because of .

The specific factors model assumes that there are goods and factor(s) of production.

In the specific factors model,a country's production function is because of .