Version 02 Question 1 (4.0 points): Indicate whether statement below is True (T) or False (F) - Circle T for True and F for False The statement "both nations use the different technology" is one of the assumptions of T F 1 Heckscher- Ohlin theory on the comparative advantage T F .2 An import quota is a non-tariff trade barrier that imposes a limit on the quantity of commodities that may be imported Customs union theory shows that the formation of a customs union will reduce members T IF 3 real welfare when the trade diversion effect exceeds the trade creation effect If each worker in Vietnam can produce either 20 bushels of rice or 1 car per day, and T F 4 each worker in Germany can produce either 30 bushels of rice or 4 cars per day, Vietnam and Germany both can gain if Vietnam exports cars and Germany exports rice If a German manufacturer of household appliances wants to take advantage of the T F 5 cheaper labor available in Malaysia, it will build a plant in Malaysia and send all German workers to operate it T F 6 The country whose K/L ratio is the largest is defined to be the labor-abundant country T F If each worker in Japan can produce either 40 bottles of wine or 40 yards of clothing pen 7 hour and each worker in Australia can produce either 20 bottles of wine or 10 yards off clothing per hour, Japan has a comparative advantage in wine production T F 8 The statement "Labor can move freely between countries" is one of the theory assumptions on comparative advantage developed by D. Ricardo