Question :
61.Who the proponent of the theory of comparative advantage?
A. Adam Smith
B. David Ricardo
C. Paul : 1299289
61.Who is the proponent of the theory of comparative advantage?
A. Adam Smith
B. David Ricardo
C. Paul Samuelson
D. Eli Heckscher
E. Bertil Ohlin
62.Palladia specializes in the production of beef and produces beef more efficiently than any other country. It buys wheat, which it produces less efficiently than beef, from Rhodia, even though it produces wheat more efficiently than Rhodia. Which of the following theories of international trade support Palladia’s decision to buy wheat from Rhodia?
A. The Samuelson critique
B. Mercantilism
C. Ricardo’s theory of comparative advantage
D. Adam Smith’s theory of absolute advantage
E. The Leontief paradox
63._____ suggests that consumers in all nations can consume more if there are no restrictions on trade.
A. The Heckscher-Ohlin theory
B. Mercantilism
C. Leontief’s paradox
D. Ricardo’s theory of comparative advantage
E. The Samuelson critique
64._____ suggests that trade is a positive-sum game in which all participating countries fetch economic gains.
A. The Heckscher-Ohlin theory
B. Mercantilism
C. The theory of comparative advantage
D. Leontief’s paradox
E. The Samuelson critique
65.Argonia and Selenia have specialized in the production of industrial equipment and pharmaceuticals respectively. Argonia exports industrial equipment to Selenia, which in turn exports chemicals and medicines to Argonia. This mutually beneficial trade relationship best illustrates _____.
A. the significance of trade barriers
B. a positive-sum game
C. a first-mover advantage
D. the advantages of mercantilism
E. a zero-sum game
66.Consider two countries Daria and Atlantis. Daria is a major producer of wheat and rice while Atlantis specializes in the production of fertilizers and manufacturing equipment. Engaging in free trade benefits both countries since Daria is an agrarian nation and Atlantis lacks arable land. This follows the theory of comparative advantage, and we can say that engaging in free trade benefits all countries that participate in it. Which of the following is an inaccurate assumption on which this conclusion is based?
A. We have assumed a simple world in which there are only two countries.
B. We have assumed that each country has a fixed stock of resources.
C. We have assumed that Daria and Atlantis do not engage in freed trade with other countries.
D. We have assumed that agrarian nations do not specialize in producing fertilizers.
E. We have assumed that industrial nations do not have arable land.
67._____ argued that in certain circumstances the theory of comparative advantage predicts that a rich country might be worse off by switching to a free trade regime with a poor nation.
A. Raymond Vernon
B. Andrew Warner
C. Paul Samuelson
D. Jeffery Sachs
E. David Ricardo
68._____ means that the units of resources required to produce a good are assumed to remain constant no matter where one is on a country’s production possibility frontier.
A. Zero-sum game
B. Positive-sum game
C. Constant returns to specialization
D. Diminishing returns
E. Economies of scale
69.Diminishing returns to specialization occurs when:
A. resources can move freely from the production of one good to another within a country.
B. more units of resources are required to produce each additional unit.
C. the cost of producing goods reduces substantially with increase in number of goods produced.
D. the quality of resources comes down as a result of producing more goods.
E. the pain caused by the movement toward a free trade regime is a long-term phenomenon.
70.It more realistic to assume diminishing returns to specialization when applying the theory of comparative advantage to a simplified model with two nations because:
A. there exist differences in the prices of resources in different countries.
B. resources can move freely from the production of one good to another within a country.
C. all resources are not of the same quality.
D. different goods use resources in the same proportions.
E. trade does not affect the income distribution within a country.
