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Costing
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Match the items of List-I with the items of List-II and indicate the correct answer.
List-I List-II
a. Absolute cost advantage theory 1. The empirical evidence based on US export of labour-intensive goods challenging the factor endowment theory.
b. Comparative cost advantage theory 2. A country with a direct cost advantage in the production of a product on account of greater efficiency.
c. Factor endowment theory 3. A country should produce and export a commodity that primarily involves a factor of production in abundance within the country.
d. Leontief paradox 4. A country should specialize in the production and export of a commodity in which it possesses the greatest relative advantage.

Answer & Solution
Correct Answer: Option A
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