A. The prices of trade goods to be lower than when there are no transportation costs
B. specialization to stop when the production costs of the trading partners equalize
C. The volume of trade to be less than when there are no transportation costs
D. The gains from trade to be greater than when there are no transportation costs
Related Mcqs:
- The comparative advantage comes if each trading partners has a product that will bring a better price in another country than it will at home. Which economist proposed the principle of comparative advantage ?
A. Adam Smith
B. David Ricardo
C. David Smith
D. Adam Ricardo - The theory that states that a country has a comparative advantage in the production of a product if that country is relatively well endowed with inputs used intensively in the production of that product is the?
A. Ricardo Malthus theorem
B. Heckscher Ohlin theorem
C. Lucas-Laffer theorem
D. Friedman Samuelson theorem - 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) - The comparative advantage model of Ricardo was based on ?
A. intraindustry specialization and trade
B. interindustry specialization and trade
C. demand conditions underlying specialization and trade
D. income conditions underlying specialization and 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 - A country has a comparative advantage in the production of a product if the good’s _____ cost in different from the good’s _____ cost in another country ?
A. resource; resource
B. foreign exchange money
C. opportunity; opportunity
D. money; opportunity - LDCs often have a comparative advantage in the production of ?
A. primary products
B. intermediate products
C. manufactured products
D. financial services - Should international transportation costs decrease the effect on international trade would include a (an) ?
A. increase in the volume of trade
B. Smaller gain from trade
C. Decline in the income of home producers
D. Decrease in the level of specialization in production - Suppose both buyers and sellers of wheat expect the price of wheat to rise in the near future. What would we expect to happen to the equilibrium price and quantity in the market for wheat today ?
A. The impact on both price and quantity is ambiguous
B. Price will decrease, quantity is ambiguous.
C. price will increase, quantity will decrease
D. price will increase, quantity is ambiguous.
E. Price will increase, quantity will increase - 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
