8. The factor-price equalization theory and transportation costs Which of the following statements about the factor-price equalization theory and the effects of transportation costs are correct? Check all that apply. Workers in trading nations always earn the same wages, and capital earns the same interest income. Free trade, in the absence of transportation costs or other barriers to trade, tends to equalize product prices and factor prices. Differences in transport costs do not affect the comparative advantage of trading nations. Transportation costs prevent product prices from equalizing. Which of the following statements about transportation costs are correct? Check all that apply. When transportation costs rise, markets tend to substitute goods that are from closer locations. Since the 1960s, transportation costs, as a percentage of the value of all U.S. imports, increased twofold. The decline in the U.S. relative cost of international transportation has contributed to a higher volume of trade. Transportation costs have declined due to technological improvements for transporting goods. International transportation costs are increasing everywhere in the world except in the United States.
8. The factor-price equalization theory and transportation costs Which of the following statements about the factor-price equalization theory and the effects of transportation costs are correct? Check all that apply. Workers in trading nations always earn the same wages, and capital earns the same interest income. Free trade, in the absence of transportation costs or other barriers to trade, tends to equalize product prices and factor prices. Differences in transport costs do not affect the comparative advantage of trading nations. Transportation costs prevent product prices from equalizing. Which of the following statements about transportation costs are correct? Check all that apply. When transportation costs rise, markets tend to substitute goods that are from closer locations. Since the 1960s, transportation costs, as a percentage of the value of all U.S. imports, increased twofold. The decline in the U.S. relative cost of international transportation has contributed to a higher volume of trade. Transportation costs have declined due to technological improvements for transporting goods. International transportation costs are increasing everywhere in the world except in the United States.
Chapter13: General Equilibrium And Welfare
Section: Chapter Questions
Problem 13.10P
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Transcribed Image Text:8. The factor-price equalization theory and transportation costs
Which of the following statements about the factor-price equalization theory and the effects of transportation costs are correct? Check all that apply.
Workers in trading nations always earn the same wages, and capital earns the same interest income.
Free trade, in the absence of transportation costs or other barriers to trade, tends to equalize product prices and factor prices.
Differences in transport costs do not affect the comparative advantage of trading nations.
Transportation costs prevent product prices from equalizing.
Which of the following statements about transportation costs are correct? Check all that apply.
When transportation costs rise, markets tend to substitute goods that are from closer locations.
Since the 1960s, transportation costs, as a percentage of the value of all U.S. imports, increased twofold.
The decline in the U.S. relative cost of international transportation has contributed to a higher volume of trade.
Transportation costs have declined due to technological improvements for transporting goods.
International transportation costs are increasing everywhere in the world except in the United States.
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