Which of the Following Is the Reason Why Most Economists

question 16

Multiple Choice

Which of the following is the reason why most economists prefer Heckscher-Ohlin theory to Ricardo's theory?

• A) Heckscher-Ohlin stresses on the differences in productivity between nations.
• B) Ricardo's theory considers factor endowments to describe national competitiveness.
• C) Heckscher-Ohlin theory makes fewer simplifying assumptions.
• D) Ricardo's theory considers the law of marginal returns.

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Definitions:

Marginal Social Cost

The total cost to society of producing an additional unit of a good or service, including both the cost to the producer and the cost of any negative externalities associated with production.

Marginal Social Benefit

Marginal social benefit is the additional gain to society as a whole from producing one more unit of a good or service.

Emissions Tax

A tax levied on the emission of pollutants, aimed at reducing the level of harmful emissions released into the environment.

Catalytic Converter

An emissions control device that converts toxic gases and pollutants in exhaust gas from an internal combustion engine into less-toxic pollutants.