The World of Trade
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Questions and Answers

According to Adam Smith, why is trade undertaken by two or more countries?

  • Because of factor endowments
  • Because of autarky
  • Because of absolute advantage (correct)
  • Because of comparative advantage

    • According to David Ricardo, why is trade undertaken by two or more countries?

  • Because of autarky
  • Because of factor endowments
  • Because of comparative advantage (correct)
  • Because of absolute advantage

    • What is autarky?

  • The type of commodities that are exported or imported
  • The increase in welfare resulting from international trade
  • The absence of trade (correct)
  • The presence of trade

    • What are the reasons for specialization?

    <p>All of the above</p> Signup and view all the answers

    What is the pattern of trade?

    <p>The type of commodities that are exported or imported</p> Signup and view all the answers

    According to Adam Smith, why is trade undertaken by two or more countries?

    <p>Because of absolute advantage</p> Signup and view all the answers

    What is autarky?

    <p>The absence of trade</p> Signup and view all the answers

    According to Heckscher-Ohlin, why is trade undertaken by two or more countries?

    <p>Because of factor endowments</p> Signup and view all the answers

    What are the reasons for specialization?

    <p>Better knowledge, resources, geographical advantage</p> Signup and view all the answers

    What are gains from trade?

    <p>The increase in welfare resulting from international trade</p> Signup and view all the answers

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