Arrange the following theories of international trade in chronological order as they appear: (a) Theory…
Smith's absolute-cost account precedes Ricardo's comparative-cost account. Haberler's opportunity-cost reformulation comes later, followed by the factor-price-equalisation…
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Arrange the following theories of international trade in chronological order as they appear:
(a) Theory of Opportunity Cost
(b) Theory of Comparative Cost
(c) Factor Price Equalisation Theorem
(d) Theory of absolute cost
Identify the correct chronological order.
Answer and explanation
Correct answer A
Smith's absolute-cost account precedes Ricardo's comparative-cost account. Haberler's opportunity-cost reformulation comes later, followed by the factor-price-equalisation theorem associated with the Heckscher-Ohlin-Samuelson framework. Hence absolute cost, comparative cost, opportunity cost, factor-price equalisation is the appropriate sequence. (d), (b), (a), (c) (c), (b), (d), (a) (b), (d), (a), (c) (a), (c), (d), (b)
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UGC NET Economics