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True or False
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1.
Ricardo argued that countries trade because of differences in resource productivities.
A)TRUE
B)FALSE
2.
Heckscher-Ohlin theory predicts that countries will export those goods in which the country has an absolute advantage.
A)TRUE
B)FALSE
3.
In the short-run, consumers of import-competing goods and producers of exportable goods lose from free trade.
A)TRUE
B)FALSE
4.
The Stolper-Samuelson theorem predicts that factors that are abundant and used intensively in the export sector will see their incomes increase as a result of trade while abundant resources used intensively in the import-competing sector will see their incomes decline as a result of trade.
A)TRUE
B)FALSE
5.
The factor-price equalization theory predicts that trade will equalize a factor's rate of pay in all countries regardless of whether the factor can move between countries.
A)TRUE
B)FALSE





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