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
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 Heckscher-Ohlin theory explains comparative advantage as the result of differences in countries ?
A. Economies of large-scale production
B. Relative abundance of various resources
C. Relative costs of labor
D. Research and development expenditures - 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 - Assume that Country A is relatively abundant in labor and Country B is relatively abundant in land Note that wages are the returns to labor and rents are the returns to land According to the factor price equalization theorem, once Country A begins specializing according to comparative advantage and trading with Country B: A. wages and rents should fall in Country A B. wages and rents should rise in Country A C. wages should rise and rents should fall in Country A D. wages should fall and rents should raise in Country A ?
XA. wages and rents should fall in Country A
B. wages and rents should rise in Country A
C. wages should rise and rents should fall in Country A
D. wages should fall and rents should raise in Country A - Industrial policies intended to foster comparative advantage for domestic industries could result in the implementation of ?
A. research and development subsidies
B. loan guarantees
C. low interest rate loans
D. All of the above - 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 - 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 - By adjusting the model of comparative advantage to include transportation costs along with production costs we would expect ?
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
