In Comparative Advantage,the Assumption Is That Resources Can Move Freely

question 36

Multiple Choice

In comparative advantage,the assumption is that resources can move freely from production of one good to another.Why is this assumption unrealistic?

• A)The process of shifting resources from one good to another eliminates human suffering.
• B)The benefit of free trade is much lesser compared to the cost of shifting resources.
• C)The process of moving resources causes friction and human suffering.
• D)There are regulations that prohibit such movement.

---

Definitions:

Conspicuous Consumption

A term coined by Thorstein Veblen, referring to the spending of money on luxury goods and services to publicly display economic power—the consumption for the sake of prestige or status rather than utility.

Reputability

Refers to the quality or state of being reputable, widely respected, and honored by others, often used in the context of individuals, organizations, or businesses.

Leisure

Time spent away from work and essential domestic activities, typically used for relaxation, recreation, or personal interests.

Economic Motives

The underlying reasons that guide individuals or entities to make decisions regarding the allocation of resources.