Which one of the following is NOT an assumption contained in the Classical/Ricardo trade model?
A) Factors of production (labor) are completely mobile within a country.
B) Factors of production (labor) are completely mobile between countries.
C) Marginal costs are constant as production increases for a firm/industry.
D) Transportation costs of goods between countries are zero.

Question

Quizplus · Accepted Answer

The Classical/Ricardo trade model assumes that factors of production, such as labor, are completely mobile within a country but not between countries. This immobility between countries is a key distinction from the assumption of mobility within countries.

Which One of the Following Is NOT an Assumption Contained