multiply choices
16. Assume that Country A, in the absence of trade, finds itself relatively abundant in labor and relatively scarce in
land. The factor endowment theory reasons that with free trade, the internal distribution of national income in Country A will change in favor of
A. Labor
C. Both labor and land
B. Land
D. Neither labor nor land
17. With economies of scale and decreasing unit costs, a country has the incentive to:
A. Specialize completely in the product of its B. Specialize partially in the product of its comparative advantage comparative advantage
C. Specialize completely in the product of its D. Specialize partially in the product of its comparative disadvantage comparative disadvantage
18. Stringent governmental regulations (e.g., air quality standards) imposed on domestic steel manufacturers tend
to:
A. Enhance their competitiveness in the international B. Detract from their competitiveness in the market international market
C. Increase the profitability and productivity of D. Reduce the market share of foreign firms selling domestic manufacturers steel in the domestic market