The assumption that the two goods are made using different factor ...

[cartlidgeashley]

The assumption that the two goods are made using different factor intensities raises the likelihood of incomplete specialization after trade begins.
 
  Indicate whether the statement is true or false

Question 2

The European Union membership criteria includes all of the following EXCEPT
 
  A) the country must participate in free trade with all of its goods and services.
  B) the country must follow market-based economics.
  C) the country must formally adopt the EU-wide rules such as technical standards, environmental inspections, banking supervision, etc.
  D) the country must be a stable functioning democracy.
  E) None of the above.

[chreslie]

Answer to Question 1

TRUE
Explanation: It introduces increasing opportunity costs into the model.

Answer to Question 2

A