The specificfactors model assumes that in each industry (such as manufacturing and agriculture) there are factors of production that are:
a. less productive.
b. outsourced to other nations.
c. fixed or immobile.
d. very scarce and therefore have a high supply price.
Ans: c. fixed or immobile.
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An intermediate good is a good that is
A) neither normal nor inferior. B) used as an input. C) a stand-in for all goods. D) is tangible good that includes substantial services.
Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
Based on the graph showing the Phillips curve, you would expect to see ______ at point A than at point B.
a. higher real wages
b. lower real wages
c. prices increasing faster
d. companies seeking more workers
In the short run, a competitive firm has a marginal product of labor, MPL = 8L-0.5. The output price is $16 per unit and the wage is $2 per hour. At the profit-maximizing level, how many units of labor are hired by the firm?
A) L = 4 B) L = 6 C) L = 12 D) L = 8