According to the Classical theory of international trade ?
Correct answer: D. All of the above are false
- A. Only countries with low wages will export
- B. Only countries with high wages will import
- C. Countries with high wages will have higher prices
- D. All of the above are false
Explanation
Classical trade theory explains trade through productivity and opportunity-cost differences, not simply through national wage levels or price levels. Therefore none of the first three wage-based statements is generally valid.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Microeconomics
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
Practise Microeconomics
1,742 free Microeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Economics questions like this
Economics is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Microeconomics questions
Absolute advantage is determined by ?
If the relative price (MRT) of S were to increase, then the price line would ?
If a country has a bowed out (concave to the origin) production possibility frontier then production is said to be subject to ?
The classical trade theories of Smith and Ricardo predict that ?
International trade is based on the nation that ?
If Hong Kong and Taiwan have identical production possibilities curves that are subject to increasing opportunity costs ?