INTERNATIONAL TRADE

Who is the father of the theory of absolute advantage?

• Adam Smith

• David Ricardo

• Heckscher

• Ohlin

Comparative Advantage theory is based on the concept of:

• Equal productivity
  

• Minimum trade restrictions
  

• 
  Opportunity cost
  

• 
  Product life cycle

The theory of comparative advantage was given by:

• Karl Marx
  

• 
  Adam Smith
  

• 
  David Ricardo
  

• 
  John Maynard Keynes

The Heckscher-Ohlin theory explains trade based on:

• Economies of scale
  

• 
  Technological innovation
  

• 
  
  Consumer preferences

• 
  Factor endowments (labour and capital)
  

According to Mercantilism, a country should:

• Import more than it exports
  

• Specialize in one product
  

• 
  Maintain a trade surplus
  

• 
  Trade only with colonies

The Product Life Cycle Theory was developed by:

• . Michael Porter

• Adam Smith
  

• 
  Raymond Vernon
  

• David Ricardo
  

Which of the following is NOT an assumption of Ricardian theory of comparative advantage?

• Capital mobility between countries

• Technological differences exist
  

• 
  Constant returns to scale
  

• Labour is the only factor of production
  

According to Heckscher-Ohlin theory, a capital-abundant country will:

• Export capital-intensive goods
  

• Import capital-intensive goods
  

• Export labour-intensive goods
  

• Not engage in trade

Which of the following best describes the Leontief Paradox?

A

• .The product life cycle shortens due to technology
  

• The U.S. exports more labour-intensive goods despite being capital-abundant
  

• Countries always follow comparative advantage
  

• 
  Trade leads to equal income distribution

Who developed the Five Forces Model?

• Henry Mintzberg
  

• 
  Peter Drucker
  

• 
  Philip Kotler

• Michael E. Porter