Ricardo's Model of Comparative Advantage Assumed All of the Following

question 142

Multiple Choice

Ricardo's model of comparative advantage assumed all of the following except:

• A) Trade is balanced,thus ruling out flows of money between nations
• B) Firms make production decisions in an attempt to maximize profits
• C) Free trade occurs between nations
• D) Labor is immobile within a country,but is incapable of moving between countries

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Definitions:

Minimum of Effort

A principle suggesting that individuals, systems, or organizations naturally tend to select the path or decision that requires the least amount of work or effort.

Specific Effort

Specific effort refers to the targeted exertion or dedicated work directed towards accomplishing a particular task or achieving a specific goal.

Shopping Effort

The amount of time and energy consumers are willing to spend in the process of searching for, selecting, and purchasing products or services.

Nondurable Good

A good that is consumed or has a lifespan of less than three years, such as food or stationery.