Compared to a hypothetical free trade equilibrium under the assumption of zero transport costs, a positive cost of transportation:
A) causes the price in the importing country to fall.
B) causes the price in the exporting country to rise.
C) causes the quantity exported/imported to rise.
D) reduces the net welfare gains from international trade.
Correct Answer:
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Q1: A shortcoming of the Heckscher-Ohlin model of
Q3: Compared to a free trade equilibrium when
Q4: During the nineteenth century, transport costs:
A) fell
Q5: During the nineteenth century, price gaps:
A) shrank
Q6: The HO model assumes that when an
Q7: The HO model assumes that when an
Q8: When an economy shifts from no trade
Q9: When an economy shifts from no trade
Q10: The model that shows how the economy
Q11: Compared to the Heckscher-Ohlin model, all other
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