Exam 3: Sources of Comparative Advantage

If tastes and preferences are identical for two trading nations,then comparative advantage is the result of

According to the theory of intra-industry trade,many manufactured goods undergo a trade cycle in which the home country initially is an exporter and eventually becomes an importer of a product.

The Linder theory assets that,for manufactured goods,countries with ______ will trade intensively with each other.

According to the product life cycle theory,the last stage of a product's trade cycle is when it becomes an import-competing good.

If Japanese workers receive lower wages in the production of autos than do American workers:

Generally speaking,transportation costs are more important than production costs as a source of comparative advantage.

According to the product-life-cycle theory,the first stage of a product's trade cycle is when it is introduced to the home market.

Wage inequality in the United States has been associated with

Europe's jumbo-jet manufacturer,Airbus,has justified receiving governmental subsidies on the grounds that the subsidies prevent the United States from becoming a monopoly in the jumbo-jet market.

The imposition of pollution-control regulations on domestic steel manufacturers leads to decreases in production costs and an improvement in the steel manufacturers' competitiveness.

Assume that the United States is scarce in labor and abundant in capital.According to the factor price equalization theory,free trade policies would tend to be be opposed by ______ in the United States.

According to the product life cycle theory,trade between countries takes place because of

Which trade theory is tantamount to a short-run version of the factor price equalization theory?

The theory of overlapping demands contends that international trade in manufactured products is strongest among nations with similar income levels.

Proponents of ____ maintain that government should enact policies that encourage the development of emerging,"sunrise" industries.

To justify the subsidies it has received from European governments,The Airbus Company has used all of the following arguments except:

With economies of scale and decreasing unit costs,a country has the incentive to:

Although the theory of comparative advantage explains trade in manufactured goods,it has no explanatory value for trade in business services.

A product will be traded only if the cost of transporting it between nations is less than the pretrade difference between their relative product prices.

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?