Q. 1. The article states, "Starting about 1950, the relative returns for schooling rose, and they skyrocketed after 1980. The reason is supply and demand....Those in need of skilled labor is bidding for a relatively stagnant supply [of educated workers] and so must pay more." U.S. trade as a fraction of the economy has also grown somewhat since about 1950. Compare the statement from the article with the prediction about the distribution of income from Heckscher-Ohlin model.

2. What is wrong with claiming that changes in the distribution of income are associated with trade instead of the technological changes that the article discusses?

3. If technological changes are driving the income inequality within the U.S., what predictions can we make about income inequality within other countries that the U.S. trades with?