{"id":33911,"date":"2024-04-15T09:23:30","date_gmt":"2024-04-15T09:23:30","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=33911"},"modified":"2024-04-15T09:23:30","modified_gmt":"2024-04-15T09:23:30","slug":"assertion-a-comparative-cost-theory-is-static-in-character-reason-r-comparative-cost-theory-is-based-on-fixed-supplies-of-factors-of-production","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/assertion-a-comparative-cost-theory-is-static-in-character-reason-r-comparative-cost-theory-is-based-on-fixed-supplies-of-factors-of-production\/","title":{"rendered":"Assertion (A): Comparative cost theory is static in character. Reason (R): Comparative cost theory is based on fixed supplies of factors of production"},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a9b3586a3fbd\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"false\">\r\n                    (A) is correct, but (R) is incorrect                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"true\">\r\n                    (R) is correct, but (A) is incorrect                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"false\">\r\n                    Both (A) and (R) are correct, but (R) is not the correct explanation of (A)                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"false\">\r\n                    Both (A) and (R) are correct and (R) is the correct explanation of (A)                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is: <strong>Both (A) and (R) are correct and (R) is the correct explanation of (A)<\/strong>.<\/p>\n<p>Comparative cost theory is a theory of international trade that explains how countries can benefit from trade even if one country is more efficient at producing all goods than another country. The theory states that a country should specialize in producing goods in which it has a comparative advantage, which is a lower opportunity cost of producing that good than another country.<\/p>\n<p>Comparative cost theory is based on the assumption that the supplies of factors of production are fixed. This means that the amount of land, labor, and capital available in a country does not change over time. This assumption is not always realistic, as the supplies of factors of production can change due to factors such as technological progress, immigration, and natural disasters. However, the assumption of fixed factor supplies is a useful simplification that allows us to understand the basic principles of comparative cost theory.<\/p>\n<p>The assertion (A) is correct because comparative cost theory is based on the assumption of <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n             <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div>        <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> fixed factor supplies. The reason (R) is also correct because comparative cost theory states that a country should specialize in producing goods in which it has a comparative advantage. Therefore, both (A) and (R) are correct and (R) is the correct explanation of (A).<\/p>\n<p>Here is a brief explanation of each option:<\/p>\n<ul>\n<li>Option A: (A) is correct, but (R) is incorrect. This option is incorrect because (R) is also correct.<\/li>\n<li>Option B: (R) is correct, but (A) is incorrect. This option is incorrect because (A) is also correct.<\/li>\n<li>Option C: Both (A) and (R) are correct, but (R) is not the correct explanation of (A). This option is incorrect because (R) is the correct explanation of (A).<\/li>\n<li>Option D: Both (A) and (R) are correct and (R) is the correct explanation of (A). This option is correct because both (A) and (R) are correct and (R) is the correct explanation of (A).<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Join Our Telegram Channel Subscribe on YouTube<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[702],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Assertion (A): Comparative cost theory is static in character. 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