VWL Makroökonomie Aussenwirtschaft Reale Aussenwirtschaftstheorie und -politik I

Exercise 1

Mark the correct statement(s).

  A country has a comparative advantage over another in the production of a good if it has higher labour productivity.
  Countries tend to have comparative advantage in goods that are intensive in their abundant factor.
  Trade between countries with different comparative advantages due to differences in the abundance of factors will tend to lead to greater equality in factor prices.
  The law of comparative cost advantage does not work if countries enjoy absolute advantages in the production of all goods.
  Due to increasing opportunity costs the production possibility curves are rather bowed-out than linear.