One of the Limitations to the Theory of Comparative Advantage

question 118

Multiple Choice

One of the limitations to the theory of comparative advantage is that it assumes:

• A) inflation
• B) constant returns to scale
• C) new government regulations and higher taxes.
• D) new product development
• E) excessive transportation costs

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Definitions:

Unreasonably Dangerous

A term referring to products or situations that pose a significant risk of injury to users or bystanders beyond what would be considered typical or expected.

Ordinary Consumer

Refers to an average or typical consumer in the marketplace, often considered in legal contexts to assess product labeling and advertising.

Economically Feasible

Describes a project or action that is financially viable, with costs that do not exceed the anticipated benefits or returns.

Deceptive Advertising

A marketing practice that misleads consumers about a product or service's quality, safety, or performance.