Answer & Solution
Answer: Option
B
Solution:
Let's understand each economist and their contribution:
Adam Smith: He is known for his theory of absolute advantage, which explains how a country can benefit from specializing in producing goods it can make more efficiently than other countries.
David Ricardo: He built on Smith's idea with his theory of comparative advantage. This theory says that even if a country isn't the absolute best at producing something, it should still specialize in what it's *relatively* better at, leading to overall gains from trade.
Ohlin: He further developed the theory of international trade by focusing on endowment – the resources a country possesses, like labor, capital, and land. A country's unique endowment influences what it produces and trades.
I.B. Kravis: While less directly related to the core theories above, Kravis's work often involved the availability of goods and services in the context of international trade and comparisons of purchasing power.
Now, let's match them correctly:
Adam Smith (a) is linked to Absolute advantage (3).
David Ricardo (b) is linked to Comparative advantage (4).
Ohlin (c) is linked to Endowment (2).
I.B. Kravis (d) is linked to Availability (1).
Therefore, the correct answer is Option C: a-3, b-4, c-2, d-1
