A. actual differences in labor productivity between countries
B. relative differences in labor productivity between countries
C. Both (a) and (b)
D. Neither (a) nor (b)
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 - If tastes are identical between countries, then comparative advantage is determined by ?
A. supply condition only
B. demand conditions only
C. supply and demand conditions
D. can’t tell without more information - Country A has the comparative advantage in ?
A. Wine
B. Beer
C. Both wine and beer
D. Neither wine nor beer - According to the principle of comparative advantage ?
A. South Korea should export steel
B. South Korea should export steel and DVDs
C. Japan should export steel
D. Japan should export steel and DVDs - The earliest statement of the principle of comparative advantage is associated with ?
A. Adam Smith
B. David Ricardo
C. Eli Heckscher
D. Berti IOhlin - If countries were to trade along the lines of comparative advantage ?
A. A would export X to B
B. A would export Y to B
C. Neither country would want to trade
D. None of the above - Country B has the comparative advantage in ?
A. Wine
B. Beer
C. Both wine and beer
D. Neither wine nor beer - LDCs often have a comparative advantage in the production of ?
A. primary products
B. intermediate products
C. manufactured products
D. financial services - 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) - Dynamic comparative advantage theory ?
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
