Why Do Diminishing Rather Than Constant Returns to Specialization Sometimes

question 78

Multiple Choice

Why do diminishing rather than constant returns to specialization sometimes occur?

• A) All resources are of the same quality.
• B) Resources can shift from the production of one good to another seamlessly.
• C) Each country has a fixed stock of resources.
• D) Different goods use different resources in different proportions.
• E) Trade does not affect the distribution of income within a country.

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