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Economics
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2 Nov 2020

1. The theory of comparative advantage suggests that trade should happen between economies with large differences in opportunity costs of production. True or False.

a. True

b. False

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Microeconomics
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Understanding the reason behind Intra-industry Trade between Similar Economies
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Raushan Raj
Raushan RajLv8
2 Nov 2020

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Related questions

14. As international trade increases, it contributes to a shift in jobs away from industries where that economy does not have a comparative advantage and toward industries where it does have a comparative advantage. True or False.

a. False

b. True

13. In intra-industry trade, the level of worker productivity is not determined by climate or geography. It is not even determined by the general level of education or skill. Instead, the level of worker productivity is determined by how firms engage in specific learning about specialized products, including taking advantage of economies of scale. In this vision, comparative advantage can be dynamic. 

True or False.

a. True

b. False

5. The concept of comparative advantage is based on this idea of opportunity cost from choice in a world of scarcity. True or False.

a. True

b. False

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