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Economics
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Economics
By adjusting the model of comparative advantage to include transportation costs along with production costs we would expect ?
A
The prices of trade goods to be lower than when there are no transportation costs
Option A
B
specialization to stop when the production costs of the trading partners equalize
Option B
The volume of trade to be less than when there are no transportation costs
Correct answer
D
The gains from trade to be greater than when there are no transportation costs
Option D
Correct answer: C
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