Exam 2: International Trade Theory and Application

Europe and Asia have a relative advantage in producing steel, primarily because factories in those regions are newer and more efficient. This is an example of

Government policies, like minimum wage, will tend to throw off production preferences based upon comparative advantage.

Nations may produce goods where they have disadvantages due to demand biases or even trade barriers.

Which of the following theorists state the following: "the more similar the demand preferences for manufactured goods in two countries, the more intensive is the potential trade in manufactures between them"

Which of the following statement is true?

Production function shows the amount of output that can be produced by using a given quantity of capital and labor.

In today's world economy, comparative advantage must be explained by reference to differences in

The product life cycle theory was introduced by

According to New Trade Theory, nations trade because of national advantages only.

H-O theory, according to the text, is

An example of a factor that will likely perpetuate production is

The __________ is associated with the later portion of the export monopoly (A-B) and the start of foreign production ©

The more correct purpose of international trade theory is to