What Does the HO Model Predict Will Happen to the Real

question 56

Multiple Choice

What does the HO model predict will happen to the real
Returns to factors of production after trade occurs?

• A)Labor and capital must be used together in production, and there is no room for competition for remuneration.
• B)Capital owners always get the "gains from trade."
• C)Resources used intensively in export industries (such as labor in China and capital in the United States) will see an
• Increase in their returns, whereas the resources used
• Intensively in import­competing industries will see a
• Decline in their return.
• D)Poor nations will always get the least returns to their factors of production.

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Definitions:

Arithmetic Growth

A pattern of growth where a population increases by a constant amount in each time period.

Logistic Growth

Population increase that results in an S-shaped curve; growth is slow at first, steepens, and then levels off due to environmental resistance.

Ecology

Study of the interactions of organisms with other organisms and with the physical and chemical environment.

Environmental Resistance

The combined physical, chemical, and biological limiting factors that restrict the growth, abundance, or distribution of an organism or a population within an environment.