According to the product cycle hypothesis, when a product is first invented Most research and development is done in The Rybczynski theorem says that in a two-good world, assuming that product prices are constant, growth in one factor of production has two effects While differences in the availability of factors of production are a basis for comparative advantage, another basis for comparative advantage is The reduction in a country's demand for an imported good Growth in a country's production capabilities, whether as the result of increased factors of production or improved technology, causes One of the odd effects of growth on trade is that an increase in only one of a country's factors of production