TheHeckscher-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. Relativecostsoflabor
D. Researchanddevelopment
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Boeingaircraftcompanywasableto cover its production costsofthe first "jumbo jet" in the1970sbecauseBoeing could market it to several foreign airlines in addition to domestic airlines. This illustrates:
A. howeconomiesofscale make possible a lager variety of products in international trade
B. atransferofwealthfromdomestic consumers to domestic products as the result of trade
C. howanaturalmonopoly is forced to behave more competitively with international trade
D. howanaturalmonopolyisforcedtobehavelesscompetitivelywithinternationaltrade
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?
A. Theoryoffactorendowments
B. Theoryofoverlappingdemands
C. Economiesofscaletheory
D. Productlifecycletheory
The theory of overlapping demands predicts that trade in manufactured goods is unimportant for countries with very different:
A. Tastesandpreferences
B. Expectations of future interest rate levels
C. Per-capita icome levels
D. Laborproductivities
The trade model of the Swedish economists Heckscher and Ohlin maintains that:
Absolute advantage determines the distribution of the gains from trade
B. Comparative advantage determines the distribution of the gains from trade
C. The division of labor is limited by the size of the world market
D. A country exports goods for which its resource endowments are most suited
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