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.
Question 2
Public goods, like national defense, are usually funded through government because:
a. no one cares about them, because they are public.
b. it is prohibitively difficult to withhold national defense from someone unwilling to pay for it.
c. they cost too much for private firms to produce them.
d. they provide benefits only to individuals, and not firms.
