单选题 A. By constant returns to specialization we mean the units of resources required to produce a good (cocoa or rice) are assumed to remain constant no matter where one is on a country's production possibility frontier (PPF). Thus, we assumed that it always took Ghana 10 units of resources to produce one ton of cocoa.
B. While 10 units of resources may be sufficient to increase Ghana's output of cocoa from 12 tons to 13 tons, 11 units of resources may be needed to increase output froml3 to 14 tons, 12 units of resources to increase output from 14 tons to 15 tons, and so on.
C. For example, imagine that growing cocoa uses more land and less labor than growing rice, and that Ghana tries to transfer resources from rice production to cocoa production. The rice industry will release proportionately too much labor and too little land for efficient cocoa production. To absorb the additional resources of labor and land, the cocoa industry will have to shift toward more labor-intensive methods of production.
D. As a country tries to increase its output of a certain good, it is increasingly likely to draw on more marginal resources whose productivity is not as great as those initially employed. The result is that it requires ever more resources to produce an equal increase in output.
E. Diminishing returns to specialization suggest that the gains from specialization are likely to be exhausted before specialization is complete. In reality, most countries do not specialize out, instead, produce a range of goods. However, the theory predicts that it is worthwhile to specialize until that point where the resulting gains from trade are outweighed by diminishing re turns.

单选题 The effect is that the efficiency with which the cocoa industry uses labor will decline, and returns will diminish.

单选题 Diminishing returns show that it is not feasible for a country to specialize to the degree suggested by the simple Ricardian model outlined earlier.

单选题 It is more realistic to assume diminishing returns for two reasons. First, not all resources are of the same quality.

单选题 Diminishing returns to specialization occurs when more units of resources are required to produce each additional unit.

单选题 A second reason for diminishing returns is that different goods use resources in different proportions.

单选题 However, it is more realistic to assume diminishing returns to specialization.

单选题 Thus, the basic conclusion that unrestricted free trade is beneficial still holds, although because of diminishing returns, the gains may not be as great as suggested in the constant returns case.

单选题 The simple comparative advantage model developed above assumes constant returns to specialization.