Question

Arrange the following theories in chronological order, starting from oldest to the latest: 

(A) The Rybczynski Theorem 
(B) Product Cycle Model 
(C) Technological Gap Model 
(D) Specific Factor Model 
Choose the correct answer from the options given below: 
 

• A. (A), (C), (D), (B)
• B. (A), (C), (B), (D)
• C. (B), (C), (A), (D)
• D. (C), (D), (A), (B)

Hint:

Understanding the chronological development of trade theories helps in understanding how countries approach trade and economic development.

Answer 1

The Correct Option is A

 

Step 1: Overview of the theories. 
These theories relate to international trade and the role of factors like technology, product life cycle, and specific factors.

Step 2: Chronological Order of Theories: 
- (A) The Rybczynski Theorem, developed in 1955, explains the effects of an increase in one factor endowment on the output of goods in a country. 

- (C) The Technological Gap Model, proposed by Posner in the 1960s, explains how technological differences between countries drive trade. 

- (D) The Specific Factor Model, formulated by Ricardo, looks at the short-term effects of trade, considering immobile factors. 

- (B) The Product Cycle Model, proposed by Vernon in 1966, explains the life cycle of a product and how it moves through different stages of trade.

Step 3: Correct Order. 
The correct order is: - First, The Rybczynski Theorem (A). - Then, Technological Gap Model (C). - Followed by Specific Factor Model (D). - Finally, the Product Cycle Model (B).

Step 4: Conclusion. 
The correct order is (A), (C), (D), (B), so the correct answer is (1).