Factor proportions theory differs from the theory of comparative advantage in that the focus of factor proportions theory is on the ________.
A) usage of the most abundant factors of production, while the focus of the comparative advantage theory is on the productivity of the production process
B) accumulation of financial wealth in the form of gold by encouraging imports and discouraging exports, while the comparative advantage theory focuses on usage of the most abundant factors of production
C) productivity of the production process, while the comparative advantage theory focuses on maximization of production and consumption
D) minimization of trade surpluses, whereas the comparative advantage theory focuses on the mercantilist idea that international trade is a zero-sum game

Question

Quizplus · Accepted Answer

Factor proportions theory focuses on the usage of the most abundant factors of production in a country to produce goods and services that are exported to other countries. This differs from the theory of comparative advantage, which focuses on the relative productivity of different countries in producing certain goods and services. Therefore, the correct answer is A.

Factor Proportions Theory Differs from the Theory of Comparative Advantage