In Haberler's theory of opportunity costs, trade under decreasing opportunity costs leads to ______ .
Under decreasing opportunity costs, producing more of a good lowers its opportunity cost, so a country gains by expanding production of the good it starts to specialize in.…
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In Haberler's theory of opportunity costs, trade under decreasing opportunity costs leads to ______ .
Answer and explanation
Correct answer A
Under decreasing opportunity costs, producing more of a good lowers its opportunity cost, so a country gains by expanding production of the good it starts to specialize in. Trade therefore leads to complete specialization, with each country producing only one of the commodities.
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RPSC Assistant Professor (College Education)