Which one of the following is not the assumption of Theory of Absolute and Comparative advantage?
There are transportation costs for shipping goods from one country to another
The elementary absolute- and comparative-advantage models assume no transport costs, alongside simplifying assumptions such as two countries, two goods and labour as the production factor. Therefore the presence of transportation costs is not an assumption of these basic models.
Important Questions from Theories of international trade - Teaching
The theory suggesting that the patterns of international trade are determined by factor endowment rather than productivity was propounded by which one of the following?
Match the items of List - II with the items of List - I and select the code of correct matching. The items relate to International Trade Theories.
List – I
List – II
(a)
Comparative Cost Theory
(i)
Adam Smith
(b)
Opportunity Cost Theory
(ii)
Gottfried Haberler.
(c)
Factor Endowment Theory
(iii)
David Ricardo
(d)
Absolute Cost Theory
(iv)
Eli Heckscher and Bertil Ohlin.
Match List I with List II
List I
List II
A.
Supply side of International Trade I.
David Ricardo B.
Demand side of International Trade II.
Bastable and Alfred Marshall C.
Opportunity cost of International Trade III.
G. Haberler D.
Real cost theory of International Trade IV.
Alfred Marshall and Edgeworth Choose the correct answer from the options given below:
Assertion (A): International standardization can reduce manufacturing and marketing costs through shared product designs and campaigns.
Reason (R): Some foreign markets require product adaptations to meet local preferences or legal requirements.
Choose the correct answer.Match List I with List II
Choose the correct option from the given below:List I List II Theories of International Tradee Propounder (s) (a) Theory of Absolute Advantage (i) Raymond Vernon (b) Factor Proportion Theory (ii) Steffan Linder (c) Country Similarity Theory (iii) Heckscher Ohlin (d) Product Life Cycle Theory (iv) Adam Smith
