The 1987 Study by Bowen,Leamer and Sveikauskas

question 59

Multiple Choice

The 1987 study by Bowen,Leamer and Sveikauskas

• A) supported the validity of the Leontief Paradox.
• B) supported the validity of the Heckscher-Ohlin model.
• C) used a two-country and two-product framework.
• D) demonstrated that in fact countries tend to use different technologies.
• E) proved that the U.S.'s comparative advantage relied on skilled labor.

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Definitions:

Manufacturing Overhead Applied

The amount of manufacturing overhead costs allocated to individual products or product lines based on a predetermined overhead rate.

Direct Materials

Raw materials that are directly used in the manufacturing of a product and can be easily traced back to the finished goods.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to individual products or job orders, based on a predetermined activity base.

Direct Labor Cost

The wages and related expenses for employees who are directly involved in the production of goods or services.