Underlying the theory of comparative advantage are assumptions regarding
A)free trade between nations.
B)that the factors of production (land,labor,capital,and entrepreneurial ability)are relatively immobile.
C)that the factors of production (land,labor,capital,and entrepreneurial ability)are relatively mobile.
D)free trade between nations and that the factors of production (land,labor,capital,and entrepreneurial ability)are relatively immobile.

Question

Quizplus · Accepted Answer

The theory of comparative advantage assumes that there is free trade between nations and that the factors of production are relatively immobile, meaning they cannot easily move from one country to another. This immobility is crucial for the theory, as it underpins the idea that countries will specialize in producing goods for which they have a comparative advantage.

Underlying the Theory of Comparative Advantage Are Assumptions Regarding