5. Which of the following statements is NOT true when the intra-industry trade model is compared to the H-0 model? A) H-O model is based on differences in factor endowments, while intra-industry trade model is based on product differentiation and economies of scale. B) HO model is likely to do a better job in explaining the trade pattern between developed and developing countries. C) According to both models, pretrade relative commodity prices can predict the pattern of trade. D) Unlike the H0 model, with the intraindustry trade model it is possible for all factor to experience increased return. Answer: Page: 146147 6. Suppose in 1998 US. imports and exports of automobile products from Canada are 34.52 and 8.81 billion of dollars, respectively. The intraindustry trade index is A) 0.255 B) 0.407 C) 0.593 D) 0.203 Answer: Page: 146