Sources of Comparative Advantage

A. factor endowments
B. factor intensities
C. technology
D. opportunity costs

A. International trade affords producers monopoly power
B. National governments levy imports tariffs and quotas
C. Producing goods entails increasing costs
D. Economies of scale exist for producers

A. helps explain why some nations use industrial policy to support potentially competitive new firms
B. cannot explain strategic competition between firms such as Boeing and Airbus
C. Is another name for Ricardo’s comparative advantage theory?
D. None of the above

A. Factor endowment theory
B. Product life cycle theory
C. Economies of scale theory
D. Overlapping demand theory

A. Paul Samuelson’s
B. Wolfgang Stolpher’s
C. Staffan Linder’s
D. Wassily Leontief’s

A. increased
B. Decreased
C. Not changed
D. Any of the above

A. Absolute advantage determines the distribution of the gains from trade
B. Comparative advantage determines the distribution of the gains from trade
C. The division of labor is limited by the size of the world market
D. A country exports goods for which its resource endowments are most suited

A. Theory of factor endowments
B. Theory of overlapping demands
C. Economies of scale theory
D. Product life cycle theory

A. Adam Smith
B. David Ricardo
C. John Stuart Mill
D. Eli Heckscher and Bertil Ohlin

A. high transportation costs as a proportion of product value
B. different growing seasons of the year for agricultural products
C. product differentiation for good such as automobiles
D. high per capita incomes in exporting countries