The Product Life Cycle Theory Predicts That Comparative Advantage Shifts

question 91

Multiple Choice

The product life cycle theory predicts that comparative advantage shifts away from the country of origin if:

• A)the product is introduced in many countries simultaneously.
• B)the product is highly demanded in international markets.
• C)the demand for the product drastically declines in the domestic market of the country where it was invented.
• D)other countries have lower manufacturing costs using the now-standardized technology.
• E)other countries develop highly skilled labor forces to improve product quality.

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Definitions:

Investment Project

An endeavor in which resources are invested with the goal of generating future returns, typically involving financial, time, or other forms of resources.

End of Project

The point in time when all objectives of a project have been achieved and all deliverables have been completed.

Operating Costs

Expenses associated with the day-to-day operation of a business, excluding financing costs and taxes.

Useful Life

The estimated period over which an asset is expected to be usable for its intended purpose, affecting its depreciation.