LDCs often have a comparative advantage in the production of ?

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. 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

3. Central banks in LDCs generally have less effect on expenditure and output than in LDCs because of ?

   I- an externally dependent banking system
   II- a poorly developed securities market
   III- a low percentage of demand deposits divided by the total money supply
   IV- the relative insensitivity of investment and employment to monetary policies

   A. I and II only
   B. III and IV only
   C. I, II and III only
   D. I, II , III and IV

4. 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

5. 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

6. 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

7. 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

8. 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)

9. 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

10. Country B has the comparative advantage in ?

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