The comparative advantage argument in free trade
A)ignores the cost of readjustment.
B)is a short-run argument.
C)only works for two goods at a time.
D)none of the options

Question

Quizplus · Accepted Answer

The comparative advantage argument in free trade assumes that resources will easily shift from producing one good to another based on comparative advantage. However, in reality, there may be costs associated with retraining workers or changing production processes, which can be significant and often ignored by the argument.

The Comparative Advantage Argument in Free Trade