Question

3) Comparative cost theory is static theory because it assumes
A) There is no qualitative and quantitative change in inputs
B) Labour is homogeneous within the country
C) There is no transport cost
O D) There is no production cost​

Answer 1

Answer:

The theory of comparative costs is based on the assumption that labour is used in the same fixed proportions in the production of all commodities. ... Moreover, some substitution of labour for capital is always possible in production.

Explanation:

hope its help uh____

Answer 2

Option A is the correct answer.

Comparative cost theory is static theory because it assumes there is no qualitative and quantitative change in inputs.

1. It is static theory because it is not practically applicable in real life.
2. It assumes that state of technology, factors of production, production function of two countries, unit costs are all fixed.
3. It also assumes that there are no transport cost.