If countries were to trade along the lines of comparative advantage ?

Related Mcqs:

1. 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

2. When free trade areas are set up the member countries trade with each other grows faster than their trade with other countries This is due to what economist call ?

   A. trade diversion
   B. trade channeling
   C. trade creation and trade diversion
   D. trade creation

3. If the countries were to trade along the lines of absolute advantage ?

   A. A would export X to B
   B. B would import Y from A
   C. Neither country would want to trade
   D. None of the above

4. Which industrialization policy have developing countries used which places emphasis on the comparative advantage principle as a guide to resource allocation ?

   A. export promotion
   B. import promotion
   C. international commodity agreements
   D. multilateral contracts

5. 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

6. 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

7. Country A has the comparative advantage in ?

   A. Wine
   B. Beer
   C. Both wine and beer
   D. Neither wine nor beer

8. 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

9. Comparative advantage is determined by ?

   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)

10. Country B has the comparative advantage in ?

    A. Wine
    B. Beer
    C. Both wine and beer
    D. Neither wine nor beer