Gravel is made by hand in Nepal, but by machine in the U.S. because
A. capital is much more expensive in the U.S. than in Nepal.
B. the relative prices of labor and capital differ so dramatically in the two countries.
C. the marginal product of labor is higher in Nepal than in the U.S.
D. of consumer preferences.
Answer: B
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The colonies as a whole had a significant commodity trade deficit with England. In order to finance this deficit the colonies relied on all of the following sources of income except
a. a commodity trade surplus with Southern Europe. b. the sale of colonial shipping services. c. mining of gold and silver that were used to make Colonial coins. d. British government spending in the colonies.
Consider the production possibilities frontier displayed in the figure shown. Which of the following statements is true?
3
A. Producing at point D would be inefficient.
B. Producing at point C would be inefficient.
C. Producing at point B would be inefficient.
D. Producing at point A would be inefficient.
If ATC > P, then a profit-maximizing, monopolistically competitive firms earns ________ economic profits.
A. negative B. positive C. zero D. either positive or negative
The figure above shows the production possibilities frontier for a country. How does the opportunity cost of compact cars forgone per SUV gained moving from point C to point B compare with the movement from point B to point A?
A) The opportunity cost of moving from point C to point B is greater than the movement from point B to point A. B) The opportunity cost of moving from point C to point B is less than the movement from point B to point A. C) The opportunity cost of moving from point C to point B is the same as the movement from point B to point A. D) The opportunity costs cannot be compared because the units of moving from point C to point B differ from the units of moving from point B to point A. E) More information is needed to determine how the two opportunity costs compare.