According to Staffan Linder, trade between two countries tends to be most pronounced when the countries:
A. find their tastes and preferences to quite harmonious.
B. experience economies of large-scale production over large output levels.
C. face dissimilar relative abundances of the factors of production.
D. find their per capita income levels to be approximately the same.
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Which of the following is a longrun theory, emphasizing changes in the trading position of a nation over a number of years?
A. Theory of factor endowments
B. Comparative advantage theory
C. Theory of the product cycle
D. Overlapping demand theory
The leontief paradox questioned the validity of the theory of:
A. Comparative advantage
B. Factor endowments
C. Overlapping demands
D. Absolute advantage
Which of the following would least likely apply to the product life cycle theory?
A. Calculators and computers
B. Coal and crude oil
C. Home movie cameras
D. Office machinery
Classical trade theory emphasized which of the following as an underlying explanation of the basis for trade?
A. Productivities of labor inputs
B. Tastes and preferences among nations
Changes in technologies over time
D. Quantities of economic resources
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