The Degree of a Factor's Specificity Is Directly Related to

question 16

Multiple Choice

The degree of a factor's specificity is directly related to

• A) the cost of the factor as a proportion of the long-run total cost of production.
• B) technology differences between two countries, with a more advanced technology resulting in more factor specificity.
• C) the amount of time required to redeploy the factor to a different industry.
• D) factor quality, with higher quality factors having a higher level of specificity.
• E) the mobility of the factor, with more mobile factors having more specificity.

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Definitions:

Elasticity of Resource Demand

The measure of how much the quantity demanded of a resource changes in response to a change in its price.

MRP

Marginal Revenue Product, which is the additional revenue generated from employing one more unit of a resource.

Wage Rate

The amount of money paid to an employee per unit of time worked, often hourly, daily, or annually.

Complementary Resources

Goods or services that are used together, where the use of one increases the value or demand for the other.