Improvements in Productivity May Lead to Decreasing Comparative Costs If

question 118

Multiple Choice

Improvements in productivity may lead to decreasing comparative costs if

• A) the assumption of fixed technologies under constant costs is relaxed.
• B) technologies available to each nation are maintained the same.
• C) resource endowments do not vary.
• D) comparative advantage does not change.

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Definitions:

Market Price

The contemporary price at which the market allows an asset or service to be bought or sold.

Rights Offering

A mechanism in finance, particularly in stock markets, where companies offer existing shareholders the right to buy additional shares at a discounted price before selling them to the public.

Subscription Price

The cost at which existing shareholders can purchase additional shares of stock in a company before it is offered to the public.

Market Price

The cost at which the marketplace is currently trading assets or services.