In the real world, we don't observe countries completely specializing in the production of goods for which they have a comparative advantage. One reasons for this is
A) some countries have more resources than other countries.
B) production of most goods involves increasing opportunity costs.
C) tastes for many traded goods are similar in many countries because of globalization.
D) comparative advantage works better in theory than in practice.
B
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An increase in the money wage rate
A) increases the long-run aggregate supply. B) decreases the long-run aggregate supply. C) increases the short-run aggregate supply. D) decreases the short-run aggregate supply.
Claude's Copper Clappers sells clappers for $60 each in a perfectly competitive market. At its present rate of output, Claude's marginal cost is $65, average variable cost is $25, and average total cost is $62 . To improve his profit/loss situation, Claude should
a. increase output b. reduce output but not to zero c. maintain the present rate of output d. shut down e. raise the price