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?

Related Mcqs:

1. 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

2. 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

3. 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

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. Suppose there is no tariff on imported inputs and the ratio of the value of imported inputs the value of the final product is 0.5 If the nominal tariff rate on the final product is 10 percent, the effective tariff rate equals ?

   A. 5 percent
   B. 10 percent
   C. 15 percent
   D. 20 percent

6. _______ states that as real GNP per capita rises, people demand relatively more social goods and relatively fewer private goods?

   A. incomes policy
   B. Moral hazard
   C. Wagner’s law
   D. Fiscal policy

7. LDCs often have a comparative advantage in the production of ?

   A. primary products
   B. intermediate products
   C. manufactured products
   D. financial services

8. 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

9. 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

10. 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