The Simple Comparative Advantage Model Assumes Constant Returns to Specialization

question 15

Multiple Choice

The simple comparative advantage model assumes constant returns to specialization.However,it is more realistic to assume diminishing returns to specialization because of all of the following reasons except:

• A)all resources are of the same quality.
• B)different goods use resources in different proportions.
• C)as a country tries to increase its output of a certain good,it is more likely to draw on more marginal resources whose productivity is not as great as those initially employed.
• D)if a country specializes to the degree suggested by the simple Ricardian model,the gains from specialization are likely to be exhausted before specialization is complete.

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Definitions:

Leadership Behavior

Actions and attitudes displayed by leaders, influencing team dynamics and organizational outcomes.

Reformulated Path-Goal Theory

An evolved theoretical framework that emphasizes how leaders can enhance follower performance and satisfaction by aligning leadership style with situational factors.

Inherent Trait Approach

The perspective that leadership capabilities are natural qualities that individuals are born with.

Group-Oriented Decision Process

A decision-making methodology that involves the input and consensus of the group to reach a collective decision.