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.Management Sciences
Category: Sources of Comparative Advantage
A product will be traded only if the pre-trade price difference between the two countries ?
A. is less than the cost of transporting it between them
B. is greater than the cost of transporting it between them equals the cost of transporting it between them
C. equals the cost of transporting it between them
D. more information in needed to answer this
The theory of overlapping demand predicts that trade in manufactured goods is unimportant for countries with very different ?
A. Tastes and preferences
B. Expectations of future interest rate levels
C. Per-capita income levels
D. Labor productivities
In his empirical test of comparative advantage Wassily Leontief found that ?
A. U.S exports are capital intensive relative to U.S imports
B. U.S imports are labor intensive relative to U.S exports
C. U.S exports are neither labor nor capital intensive
D. None of the above
According to the trade theory of Staffan Linder trade tends to be most pronounced in manufactured goods when trading countries have ?
A. similar endowments of natural resources
B. similar levels of technology
C. similar per-capita incomes
D. similar wage levels
According to the factor price equalization theorem, the ________ factor should oppose free. trade policies in any given country?
A. abundant
B. scarce
C. neither
D. can’t tell without more information
According to the Heckscher-Ohlin model the source of comparative advantage is a country’s ?
A. technology
B. advertising
C. factor endowments
D. both (a) and (c)
Boeing aircraft company was able to over its production costs of the first – jumbo jetll in the seventies because Boeing could market it to several foreign airlines in addition to domestic airlines. This illustrates ?
A. How economies of scale make possible a larger variety of products in international trade
B. A transfer of wealth from domestic consumer to domestic producer as the result of trade
C. How a natural monopoly is forced to behave more competitively with international trade
D. How a natural monopoly is forced to behave less competitively with international trade
The Heckscher-Ohlin theorem states that a country will have comparative advantage in the good whose production in relatively intensive in the with which the country is relatively abundant ?
A. tastes
B. technology
C. factor/resource
D. opportunity cost
One of the predictions of the Heckscher-Ohlin model is that ?
A. countries with different factor endowments but similar technologies and preferences will have a strong basis for trade with each other
B. countries with tend to specialize but not completely in their comparative advantage good
C. reciprocal demand leads to an equilibrium terms of trade by inducing change in both demand and supply
D. All of the above
Intra-industry trade theory ?
A. Explains why the United States might export autos and import clothing
B. Explains why the United States might export and import differentiated versions of the same product such as different types of autos
C. Assumes that transport costs are very low or do not exist
D. ignores seasonal considerations for agricultural goods
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