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reduce international differences in per capita ines d. lead to plete specialization 20. The HO model is a general equilibrium model because it deals with: a. production in both nations b. consumption in both nations c. trade between the two nations d. all of the above 21. The HO model is a simplification of a truly general equilibrium model because it deals with: a. two nations b. two modities c. two factors of production d. all of the above 22. The Leontief paradox refers to the empirical finding that . a. import substitutes are more Lintensive than exports b. imports are more Kintensive than exports c. exports are more Kintensive than imports d. exports are more Kintensive than import substitutes 23*. From empirical studies, we conclude that the HO theory: a. must be rejected b. must be accepted without reservations c. can be accepted while awaiting further testing d. explains all international trade 24. The factor price equalization theorem states that international trade will bring about equalization in a. relative returns only b. absolute returns only c. both relative and absolute returns d. neither absolute nor relative returns 25. International trade will ______ the price of a nation’s abundant resources and _____ the price of a nation’s scarce resources a. increase。 increase b. decrease。 decrease c. decrease。 increase d. increase。 decrease 26. One potential reasonable explanation for the Leontief paradox is that a. The . exports capital intensive goods b. . labor is more productive than its foreign counterpart c. . tastes were biased strongly in favor of capital intensive goods d. The two factor model that was used was inplete 27. According to the factor price equalization theorem a nation that has a relative capital abundance should specialize in goods that are ______ intensive resulting in an increase in the price of ______. a. capital。 capital b. capital。 labor c. labor。 capital d. labor。 labor 28. Which of the following theories is based on the demand conditions. a. Overlapping Demand Theory b. C