Question 1

The growth of clothing exports originating in Bangladesh is the result of the
A) high productivity of workers in Bangladesh.
B) low wages in Bangladesh.
C) low productivity of workers in other countries.
D) low productivity of workers in Bangladesh in industries other than those that produce clothing for export.
E) high wages in other countries.

Accepted Answer

The answer of The growth of clothing exports originating in...

Question 2

Assume that transportation costs are especially high for Widgets in the two-country, two-product Ricardian model, and Country A enjoys a comparative advantage in Widgets, then
A) country B must also enjoy a comparative advantage in Widgets.
B) country B may end up exporting Widgets.
C) country A may switch to having a comparative advantage in the other good.
D) country A will still export Widgets.
E) trade may be impossible between the two countries.

Accepted Answer

The answer of Assume that transportation costs are especially high...

Question 3

When compared with China, the growth of clothing exports originating in Bangladesh is the result of
A) the comparative advantage that Bangladesh has in the production of clothing for export.
B) the absolute advantage that China has in the production of clothing for export.
C) the absolute advantage that Bangladesh has in the production of clothing for export.
D) the comparative and absolute advantage that China has in the production of clothing for export.
E) the comparative and absolute advantage that Bangladesh has in the production of clothing for export.

Accepted Answer

The growth of clothing exports from Bangladesh is due to the country's comparative advantage in the production of clothing for export. Comparative advantage means that a country can produce a good or service more efficiently than another country, even if it does not have an absolute advantage in production. In this case, Bangladesh has a comparative advantage in the production of clothing due to factors such as lower labor costs and a more flexible labor market compared to China.

Question 4

When compared with China, the growth of clothing exports originating in Bangladesh clearly illustrates the Ricardian model of comparative advantage. Discuss and explain.

Accepted Answer

The answer of When compared with China, the growth of...

Question 5

When compared with China, the growth of clothing exports originating in Bangladesh clearly illustrates the difference between absolute and comparative advantage. Discuss and explain.

Accepted Answer

The answer of When compared with China, the growth of...

Question 6

Which of the following has been confirmed by empirical tests of the Ricardian model?
A) All predictions of the model for a multi-product, multi-country world are highly unrealistic.
B) The existence of nontraded goods results in a high degree of specialization among countries.
C) International trade has no impact on income distribution.
D) The unimportance of economies of scale as a cause of trade.
E) Companies tend to export goods in which they have a relatively high level of productivity.

Accepted Answer

Empirical tests of the Ricardian model have confirmed that companies tend to export goods in which they have a relatively high level of productivity. This is known as the "law of comparative advantage" and is one of the key principles of the Ricardian model.

Question 7

Which of the following is most likely to be an untraded good in a Ricardian two-country, multi-good model?
A) steel
B) textiles
C) haircuts
D) petroleum
E) telemarketer services

Accepted Answer

In a Ricardian model, goods are typically classified as traded or non-traded. Traded goods are those that can be transported across borders and traded between countries. Non-traded goods, on the other hand, are those that are consumed domestically and cannot be traded. Of the options given, haircuts are the most likely to be an untraded good as they cannot be transported and are consumed locally.

Quiz 3: Labor Productivity and Comparative Advantage: the Ricardian Model

The growth of clothing exports originating in Bangladesh is the result of the

Assume that transportation costs are especially high for Widgets in the two-country, two-product Ricardian model, and Country A enjoys a comparative advantage in Widgets, then

When compared with China, the growth of clothing exports originating in Bangladesh is the result of

When compared with China, the growth of clothing exports originating in Bangladesh clearly illustrates the Ricardian model of comparative advantage. Discuss and explain.

When compared with China, the growth of clothing exports originating in Bangladesh clearly illustrates the difference between absolute and comparative advantage. Discuss and explain.

Which of the following has been confirmed by empirical tests of the Ricardian model?

Which of the following is most likely to be an untraded good in a Ricardian two-country, multi-good model?