MCQs of Economics – Sources of Comparative Advantage

The Heckscher-Ohlin theory explains comparative advantage as the result of differences in countries:

The factor endowment model of international trade was developed by:

Boeing aircraft company was able to over its production costs of the first – jumbo jetll in the seventies because Boeing could market it to several foreign airlines in addition to domestic airlines. This illustrates:

Which trade theory contends that a country that initially develops and exports a new product may eventually become an importer of it and may no longer manufacture the product:

The theory of overlapping demand predicts that trade in manufactured goods is unimportant for countries with very different:

The trade model of the swedish economies Heckscher and Ohlin maintains that:

According to the factor endowment model of Heckscher and Ohlin, countries heavily endowed with land will:

For the United States empirical studies indicate that over the past two hundred years the cost of international transportation relative to the value of U.S imports has:

According to the trade theory of Staffan Linder trade tends to be most pronounced in manufactured goods when trading countries have

_____ 1954 study of U.S trade patterns showed that U.S exports were labor-intensive compared with U.S imports, even though the United States was widely regarded as a relatively capital-abundant nation

Should international transportation costs decrease the effect on international trade would include a (an)

That the division of labor is limited by the size of the market best applies to which explanation of trade:

Intra-industry trade theory:

Dynamic comparative advantage theory:

Difference in environmental standards or other government regulations among nations:

Declining costs per unit of output results from international trade especially if:

According to the Heckscher-Ohlin model the source of comparative advantage is a country’s

The Heckscher-Ohl in model rules out the classical model’s basis for trade by assuming that _____ is (are) identical between countries:

The comparative advantage model of Ricardo was based on:

The product cycle theory of trade is essentially a :

The analyzes the income distribution effects of trade in the short run when resources are immobile among industries

Industrial policies intended to foster comparative advantage for domestic industries could result in the implementation of:

By reducing the volume of trade transportation costs tend to:

If tastes are identical between countries, then comparative advantage is determined by:

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

One of the predictions of the Heckscher-Ohlin model is that:

Wassily Leontief used an input output table in order to test the:

The Heckshcer-Ohl assumes that are indentical between countries.

In his empirical tests, Wassily Leontief used an input-output table to

In his empirical test of comparative advantage Wassily Leontief found that:

Leontief’s result were considered paradoxical because the United Stated was believed to be:

According to the Heckscher-Ohlin model:

Wassily Leontief’s result’s can be interpreted as:

Advocates of industrial policy maintain that government should:

The factor endowment theory was pioneered by:

By adjusting the model of comparative advantage to include transportation costs along with production costs we would expect:

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:

According to the factor price equalization theorem, the ____ factor should oppose free.
trade policies in any given country

A product will be traded only if the pretrade price difference between the two countries

Intraindustry trade can be explained by all of the following except