Asked by
Demetrius McBride
on Dec 18, 2024Verified
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.
Verified Answer
SA
Learning Objectives
- Analyze the economic theories and strategies influencing international trade and business decisions.