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Review Questions and Problems for Chapter 3 a. Increasing opportunity costs arise because resources or factors of production are not homogeneous (i.e., all units of the same factor are not identical or of the same quality) and not used in the same fixed proportion or intensity in the production of all commodities. This means that as the nation produces more of a commodity, it must utilize resources that become progressively less efficient or less suited for the production of that commodity. As a result, the nation must give up more and more of the second commodity to release just enough resources to produce each additional unit of the first commodity (i.e., it faces increasing costs). b. In the real world, the production frontiers of different nations will usually differ because ofdifferences in factor endowments and technology. Answer to Review Questions and Problems Answer to Review Questions and Problems Answer to Review Questions and Problems Answer to Review Questions and Problems Answer to Review Questions and Problems Answer to Review Questions and Problems Answer to Review Questions and Problems Answer to Review Questions and Problems Answer to Review Questions and Problems Multiple-Choice Questions Answer to Review Questions and Problems Answer to Review Questions and Problems Answer to Review Questions and Problems Answer to Review Questions and Problems Answer to Review Questions and Problems Answer to Review Questions and Problems Answer to Review Questions and Problems Answer to Review Questions and Problems Answers to Review Questions and Problems for Chapter four 1. a. The Heckscher–Ohlin (H-0) theorem postulates that a nation will export those commodities whose production requires the intensive use of the nation’s relatively abundant and cheap factor and import the commodities whose production requires the intensive use of the nation’s relatively scarce and expensive factor. In short, the relatively labor-rich n
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