Which one of the following is a primary assumption of the free trade theories of specialization?
A)Domestic resources are unable to move from the production of one good to another.
B)Countries have objectives other than economic efficiency.
C)Specialization triggers unemployment.
D)Resources are immobile internationally.

Question

Quizplus · Accepted Answer

The primary assumption of free trade theories of specialization is that resources are immobile internationally. This means that each country has different factors of production, such as labor or natural resources, that cannot easily be moved or duplicated in other countries. Therefore, countries can specialize in producing goods and services that use their abundant resources and trade with other countries to obtain goods and services that they are not efficient at producing.

Which One of the Following Is a Primary Assumption of the Free