No change in technology, no transport cost, constant returns to scale

Question

No change in technology, no transport cost, constant returns to scale - these assumptions make the Comparative Cost advantage theory     -------
A)Dynamic
B)Redundant
C)Static
D)Unacceptable

Quizplus · Accepted Answer

The Comparative Cost advantage theory is considered static because it operates under assumptions that do not account for changes over time, such as no change in technology, no transport costs, and constant returns to scale. These assumptions simplify the analysis but do not reflect the dynamic nature of real-world economies.