The assumption of increasing opportunity costs in the HO model ...

[saraeharris]

The assumption of increasing opportunity costs in the HO model increases the likelihood that
 
  A) there will be incomplete specialization in production after trade begins.
  B) countries will be better off with free international trade.
  C) countries will maximize their standards of living from free international trade.
  D) All of the above.

Question 2

A key element in outward-looking development policies is to maintain open markets so that internal prices reflect world prices.
 
  Indicate whether the statement is true or false

[Silverbeard98]

Answer to Question 1

A

Answer to Question 2

TRUE