Even if we relax the assumptions of the simple Ricardian model that there are constant returns to scale and realistically assume diminishing returns to specialization,it can still be concluded that:
A) the benefits of unrestricted trade do not hold.
B) free trade is beneficial but the gains may not be as great as in a constant returns case.
C) governments should intervene in the market to bring about a zero-sum game.
D) the benefits of free trade are comparatively much less than government-regulated trade.
Correct Answer:
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