A. supply condition only
B. demand conditions only
C. supply and demand conditions
D. can’t tell without more information
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 - 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) - 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 - 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 - 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 - 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 - 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 - 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
