Ricardo's Model of Comparative Advantage Assumed All of the Following

question 142

Multiple Choice

Ricardo's model of comparative advantage assumed all of the following except:

• A) Trade is balanced,thus ruling out flows of money between nations
• B) Firms make production decisions in an attempt to maximize profits
• C) Free trade occurs between nations
• D) Labor is immobile within a country,but is incapable of moving between countries

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Definitions:

Humans

Members of the species Homo sapiens, characterized by their ability to use complex language, reason, and create complex social structures.

Color Blind

A condition in which a person is unable to distinguish certain colors or sees colors differently due to a lack of one or more types of color receptors in the eyes.

Species

A group of living organisms consisting of similar individuals capable of exchanging genes or interbreeding.

Peripheral Vision

The part of vision that occurs outside the very center of gaze, allowing humans to perceive objects and movement outside of the direct line of sight.