3. The theory of factor-price equalization states that ... a) for both trading partners to benefit, factor prices should

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3. The theory of factor-price equalization states that ... a) for both trading partners to benefit, factor prices should be equalized. b) free trade tends to equalize returns on productive factors across countries. c) returns on all of a country's productive factors should be the same in the long run. d) specialization inhibits the equalization of factor price. e) None of the above are true. 4. Free trade has the potential to make countries vulnerable because ... a) opening markets inevitably leads to opening of borders to unwanted influences. b) some goods are important enough not to rely upon other countries to produce. c) economic relationships inevitably spill over into the political realm, possibly leaving countries politically vulnerable. d) trade is often highly unequal. e) None of the above are true.
6. In the term "race to the bottom," the "bottom” refers to ... a) the poorest country. b) the lowest quality product. c) the weakest government regulations. d) the lowest consumer prices. e) the place where comparative disadvantages are the greatest. 7. Which one of the following is an example of a protectionist policy? a) A means-tested program to help those with very low incomes b) A Social security system that provides benefits regardless of need c) The estate tax d) A tariff on imported steel e) A tax on carbon emissions 8. In the language of economics, an "infant industry” is ... a) cute. b) the sector producing products for baby care. c) an industry that needs to be protected from foreign competition if we want to survive and mature and thus be able to compete. d) any industry that is just starting. e) an industry which has been protected too much and thus can't survive the rigors of competition. 9. What is the primary purpose of import substitution policies? a) To reduce economic inequality b) To encourage domestic industries c) To increase imports d) To increase transfers e) To decentralize markets