The Impact of Increasing, as Opposed to Constant, Costs Is

question 56

Multiple Choice

The impact of increasing, as opposed to constant, costs is to

• A) intensify and prolong the comparative advantages that any nation may have initially.
• B) expand the limits of the terms of trade.
• C) cause the bases for further specialization to disappear as nations specialize according to comparative advantage.
• D) cause nations to realize economies of scale in those products in which they specialize.

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Definitions:

Passionate

Having, showing, or characterized by intense, strong feelings or enthusiasm towards an activity, person, or concept.

Fatuous

Lacking intelligence or sense; foolishly insipid.

Exchange Relationships

Relationships based on reciprocal exchange of benefits or services, guided by the principle of quid pro quo.

Societal Progress

The development and improvement of society through advancements in education, technology, science, and social norms leading to a better quality of life.