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Demetrius McBride
on Dec 18, 2024

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Darren, a trade analyst, believes that trade is a function of a specific company's strategic initiatives and not country-level factors, production factors, or even industry characteristics. Darren's belief reflects the _____.

A) theory of absolute advantage
B) theory of comparative advantage
C) theory of economies of scale
D) theory of the international product life cycle

Theory of Absolute Advantage

An economic theory proposed by Adam Smith, which suggests that countries should specialize in the production of goods for which they have an absolute advantage.

Theory of Comparative Advantage

An economic principle stating that countries or entities benefit from specializing in and exporting goods for which they have a lower opportunity cost.

Theory of Economies of Scale

An economic concept that describes how as a firm increases its production scale, the average cost per unit of output decreases, leading to increased efficiency.

  • Analyze the economic theories and strategies influencing international trade and business decisions.
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Sedona AndersonDec 19, 2024
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