Assume That Labor Is the Only Factor of Production and That

question 11

Multiple Choice

Assume that labor is the only factor of production and that wages in the United States equal $20 per hour while wages in Japan are $10 per hour. Production costs would be lower in the United States as compared to Japan if

• A) U.S. labor productivity equaled 40 units per hour and Japan's 15 units per hour.
• B) U.S. labor productivity equaled 30 units per hour and Japan's 20 units per hour.
• C) U.S. labor productivity equaled 20 units per hour and Japan's 30 units per hour.
• D) U.S. labor productivity equaled 15 units per hour and Japan's 25 units per hour.
• E) U.S. labor productivity equaled 15 units per hour and Japan's 40 units per hour.

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Definitions:

High Concentration

Refers to a market situation where a small number of firms hold a large market share, indicating less competition.

Creative Destruction

A process in which technological innovation and progress lead to the phasing out of older industries, products, or methods, fostering new growth.

New Products

Items that have been recently introduced to the market, offering new benefits or improvements over previous versions or filling a previously unmet need.

Monopoly Market Positions

Situations where a single firm dominates the market, either in terms of sales, market share, or influence on the product itself.