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Sources of Comparative Advantage MCQs

Free 40+ Sources of Comparative Advantage MCQs for PPSC, FPSC, NTS, and Pakistan government job tests. Practise below with answers and explanations.

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Sources of Comparative Advantage — MCQs for Pakistan government job tests

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Sources of Comparative Advantage

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1.Based on the factor price equalization theorem, which type of production factor is expected to resist free trade policies within a country?

2.When the comparative advantage model is modified to factor in transportation expenses along with production costs, what outcome should we anticipate?

3.What do proponents of industrial policy argue the government should do?

4.What does the Heckscher-Ohlin model suggest about the distribution of benefits from international trade?

5.What was the outcome of Wassily Leontief's empirical investigation into comparative advantage?

6.According to the Heckscher-Ohlin model, which factors are considered the same across different countries?

7.According to the Heckscher-Ohlin theory, which of the following statements is true?

8.When consumer preferences are the same across countries, what factor determines comparative advantage?

9.Which of the following measures might be adopted under industrial policies aimed at enhancing the comparative advantage of local industries?

10.The product cycle theory of international trade is primarily classified as which type of trade theory?

11.In the Heckscher-Ohlin model, which assumption eliminates the classical explanation for trade by stating that _________ is the same across nations?

12.When does international trade lead to a reduction in the cost per unit of production?

13.What does the theory of dynamic comparative advantage primarily explain?

14.Which trade theory emphasizes that the extent of division of labor is constrained by the market's size?

15.Which 1954 research on U.S. trade patterns revealed that American exports were more labor-intensive than imports, despite the U.S. being recognized as a capital-rich country?

16.In the United States, empirical research over the last two centuries shows that the cost of international shipping compared to the value of U.S. imports has:

17.According to the Heckscher-Ohlin trade theory associated with Swedish economists, what primarily influences a country's export patterns?

18.Which trade theory explains that a country that first creates and exports a new product might later start importing it and stop producing it domestically?

19.Who are credited with formulating the factor endowment theory in international trade?

20.Which of the following is NOT a factor that explains interindustry trade?

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