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It More Realistic to Assume Diminishing Returns to Specialization When

Question 73

Multiple Choice

It more realistic to assume diminishing returns to specialization when applying the theory of comparative advantage to a simplified model with two nations because:


A) there exist differences in the prices of resources in different countries.
B) resources can move freely from the production of one good to another within a country.
C) all resources are not of the same quality.
D) different goods use resources in the same proportions.
E) trade does not affect the income distribution within a country.

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