Which of the Following Is NOT a Limitation of the Absolute

question 60

Multiple Choice

Which of the following is NOT a limitation of the absolute and comparative advantage theories?

• A) There are only two countries engaged in the production and consumption of just two goods.
• B) There are no costs for transporting traded goods from one country to another.
• C) Labor is the only resource.
• D) Specialization in the production of one good results in efficiency gains.

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Definitions:

Pharmaceutical Industry

A sector of the health care system that discovers, develops, produces, and markets drugs or pharmaceuticals for use as medications.

Creative Destruction

A concept in economics which suggests that new innovations destroy old industries and create new economic structures.

Decreasing-Cost Industry

An industry where the unit cost of production decreases as the industry's output increases, often due to economies of scale.

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the number of units produced.