Production of goods and services require different mixes of resources. Discuss the three different production resource intensities and give examples of each.
What will be an ideal response?
The first type of productive resource intensity is labor-intensive goods. These goods require a significant amount of labor to product, such as textiles, electronics, and sporting goods. Countries like China are able to produce labor-intensive goods most efficiently due to the abundant, cheap labor available. Other goods are said to be land-intensive, requiring a significant amount of land to produce. These goods include agricultural and animal products. Countries with large land masses are best suited for producing these goods, Mexico is an example. The final type of intensity is capital-intensive, production of goods requiring a significant amount of plant and equipment to produce. Airplanes, automobiles, machinery, and chemicals are capital-intensive products. Germany and the United States have a comparative advantage in producing most capital intensive products.
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A perfectly free market system may not be efficient in terms of minimizing pollution, unsafe working conditions, unfair hiring practices, and a grossly uneven distribution of wealth.
Indicate whether the statement is true or false.
If consumer confidence rises because of strong job growth in an economy, what is likely to happen to the rate of savings?
a) The savings rate will likely rise. b) The savings rate will likely fall. c) The savings rate will likely fall to zero. d) The savings rate will turn negative.
Can government raise birthrates?
What will be an ideal response?
The production function does NOT provide information about
A) the technology used in the production process. B) the types of inputs used in the production process. C) the relationship between changes in quantity of inputs and changes in the quantity of output. D) the profits of producing a good.