According to tactor endowment thoofy the drectoor and rature & trade is determin

Question

According to tactor endowment thoofy the drectoor and rature & trade is determined by The rotafcve level of/lack to inputs to production in a grven ration The strength of domestic demand for specific products The absolute level of/lack of inputs to production in a gven nation voodoo According to the Magnification effect: The owners of abundant domastic resources will experience gains from increased trade the owner of scarce domestic resources will experience gains from increased trade The price of scarce domestic resources will fall more than the price of products that use them. The price of scarce domestic resources will fall less than the price of products that use them. An import quota that does not Specify the point ?f origin or who can import the product at a Global Seiectrve Abaotete Tariff-rate Compared to free trade a quota consumer and producer surplus. Increases Decreases Has no impact on Elminates

Explanation / Answer

1. The realtive level of/ lack of inputs to production in a given nation.

The trade pattern and nature is determin3ed by comperative advantage. Relative endowment of inputs control the comperative advantage.

2. The price of scarce domestic resources will fall more than the the price of products that use them.

Magnification effect of price is the general version of Stolper Samualson theorem.

3. Global quota

4. decreases.

The effect of quota depends on the country who is importing and exporting. The effect of quota on importing country consumer surplus is negative

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