Author Question: The original comparative advantage model that used the relative abundance of factors of production ... (Read 26 times)

SO00 · **on:** Jun 30, 2018

The original comparative advantage model that used the relative abundance of factors of production to explain comparative advantage assumed that countries:
a. employed all four factors of production; land, labor, capital, and entrepreneurship.
b. employed only two factors of production; labor and capital.
c. employed only two factors of production; land and entrepreneurial ability.
d. worked with a fixed capital stock.
e. were free to vary their employment of only one factor of production; labor.

Question 2

Forms of free riding behavior
a. Always leads to underproduction
b. Occur in both external cost and public goods cases
c. Does not occur with common property resources, unlike public goods cases
d. Occurs with private goods, public goods and common property resources