"A good cannot be both land- and labor-intensive." Discuss
What will be an ideal response?
In a two good, two factor model, such as the original Heckscher-Ohlin framework, the factor intensities are relative intensities. Hence, the relevant statistic is either workers per acre (or acres per worker); or wage per rental unit (or rental per wage). In order to illustrate the logic of the statement above, let us assume that the production of a broom requires 4 workers and 1 acre. Also, let us assume that the production of one bushel of wheat requires 40 workers and 80 acres. In this case the acres per person required to produce a broom is one quarter, whereas to produce a bushel of wheat requires 2 acres per person. The wheat is therefore (relatively) land intensive, and the broom is (relatively) labor intensive.
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A) investing only in industries with high profit rates. B) charging high interest rates on loans. C) holding large equity stakes in the firms they invest in. D) avoiding investing in common stock.
In economics, the term "marginal" usually refers to
a. a small change in an economic variable b. a low-quality product or resource c. an unimportant and irrelevant economic variable d. an all-or-nothing economic decision e. a footnote or minor point
A _______________ is a bond issued by the federal government.
a. municipal bond b. Treasury bond c. corporate bond d. high-yield bond
Total cost includes:
A. only ongoing expenses, not one-time expenses. B. one-time expenses, but not ongoing expenses. C. only expenses that are variable. D. one-time expenses and ongoing expenses.