Which of the following statements is true regarding the assumptions of the absolute and comparative advantage theories?
A) The theories assume that there are many number of countries engaged in the production and consumption of just two goods.
B) The theories assume that there are additional costs for transporting traded goods from one country to another.
C) The theories assume labor to be the only resource used in the production process.
D) The theories assume that specialization in the production of one particular good results in gains in efficiency.
Correct Answer:
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