1.
A. Comparative advantage theory suggests that countries should specialize in producing goods and services in which they have lower opportunity costs and trade with other countries in order to achieve maximum efficiency and benefits.
B. Absolute advantage theory suggests that a country has an advantage in producing a particular good or service if it can produce it more efficiently than any other country.
C. Mercantilism theory, prevalent during the 16th and 17th centuries, advocates for increasing exports, decreasing imports, and accumulating wealth in the form of precious metals.
D. Heckscher-Ohlin theory asserts that countries will produce and export goods that use their abundant factors of production and import goods that use their scarce factors of production.
E. Porter's competitive advantage theory suggests that a country's success in international trade is determined by the quality of its domestic businesses and industries, including factors such as skilled labor and infrastructure.
2.
- Oil: Saudi Arabia, United States, Russia, Iraq, Canada
- Rice: China, India, Indonesia, Bangladesh, Vietnam
- Chocolates: Switzerland, Belgium, Germany, United States, France
- Wines: Italy, France, Spain, United States, Australia
- Sugar: Brazil, India, Thailand, China, Mexico
- Software: United States, India, Japan, Germany, Canada
3. Top agricultural producing countries include China, United States, India, Brazil, and Russia.
4. The top export products of the Philippines are electronic equipment, machinery, coconut oil, fruits, and nuts.
5. Examples of countries with absolute advantage in certain industries are:
- Saudi Arabia in oil production
- Japan in electronic manufacturing
- Costa Rica in coffee production
- Ghana in cocoa production
- Australia in wool production.
