The rst three questions are based on the following information: Assume two nations: Vietnam and US, and two commodities: clothing and wheat. There is only one factor of production: labour. The following table presents the number of hours it takes to produced one unit of the good in each nation: Vietnam US wheat 6 5 clothing 4 8 1. The relative price of clothing in the US is a) SIB kg of wheat b) 85 yards of clothing c) 85 kg of wheat d) SIB yards of clothing 2. If US and Vietnam were to trade, the relative price of wheat a) Can be 2 yards of clothing b) Must be between sis and 1.5 yards of clothing c) Must be between 2I3 and 1.6 yards of clothing d) Can be '/2 yards of clothing. 3. According to labour theory of value, a) US will have absolute advantage in the production of clothing and wheat. b) Vietnam will have comparative and absolute advantage in the production of clothing. c) Vietnam will have comparative advantage in the production of wheat. d) US will have comparative advantage in the production of clothing. 4. The Leontief study testing the HeckscherOhlin theory showed that a) The US exported capital-intensive goods and imported labour-intensive goods. b) The US exported labour-intensive goods and imported labour-intensive goods. c) Even though the US was a capital abundant nation. it exported labour intensive goods. d) The US was a capital abundant nation and therefore, exported capital intensive goods. 5. Offer curves tell us a) The demand and supply of both goods at different relative prices b) The demand for import good only at different relative prices. o) The supply of export good at different relative prices. d) None of the above. 6. In autarky, the quantities produced and consumed by a nation will be determined by: a) The point at which the marginal rate of substitution equals the marginal rate of transformation. b) The point at which the community indifference curve is tangent with the production possibilities frontier. c) The point at which welfare is maximized given the existing domestic resources. d) All of the above answers are correct