Discussion
Who gave the Absolute Cost Advantage model of international trade?
Answer: A
The theory of absolute cost advantage in international trade was given by Adam Smith in The Wealth of Nations (1776): a country should export the goods it can produce with fewer resources than other countries and import the others. David Ricardo gave the later theory of comparative cost, Bertil Ohlin the factor endowments theory, and Alfred Marshall the offer curves. The answer is Adam Smith, option A. Smith argued that each country should specialise in the goods in which it has an absolute advantage in cost.
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