14. 15. Assume that two countries (Home and Foreign) each produce two goods (corn and wheat) under constant cost production. Home produces 1 ton of corn or 2 tons of wheat with a day of labor. Foreign produces 4 tons of corn and 2 tons of wheat. Without trade (in autarky), Home's daily production is 40 tons of wheat and 20 tons of corn. At which international price will Home's gains from trade be largest? A. 1 ton of wheat per ton of corn B. 1.5 ton of wheat per ton of corn C. 2 tons of wheat per ton of corn D. 2.5 tons of wheat per ton of corn E. 3 tons of wheat per ton of corn A policy of tariff reduction in the clothing industry in New Zealand is A. not in the interest of New Zealand as a whole but in the interests of foreign cloth producers. B. in the interest of New Zealand as a whole and in the interest of cloth producers of the country. C. in the interest of New Zealand as a whole but not in the interest of cloth producers of the country. D. not in the interest of New Zealand as a whole but in the interests of cloth producers of the country. E. not in the interest of New Zealand as a whole and not in the interests of cloth consumers. Use the following table to answer Question 16. Factor Endowments Labor Force Capital Stock Countries A B 75 25 100 50 16. If good T is capital intensive, then following the Heckscher-Ohlin Theory A. country B will export good T. B. country A will export good T. C. both countries will export good T. D. both countries will import good T E. trade will not occur between these two countries.