Which of the Following Statements About Equilibrium Factor-Price Differentials Is

question 28

Multiple Choice

Which of the following statements about equilibrium factor-price differentials is correct? They

• A)tend to be self-eliminating.
• B)may be caused by differences in the intrinsic qualities of factors.
• C)will be eliminated when the allocation of resources is in long-run equilibrium.
• D)are unrelated to differences in non-monetary benefits.
• E)are unrelated to acquired differences in factors.

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Definitions:

Present Value

The worth today of a sum of money or cash flows expected in the future, calculated using a specified return rate.

Market Rate

The prevailing price or interest rate for goods, services, or securities in a particular market at a given time.

Extraction

The process of removing raw materials from the earth, which are then used in the production of goods and services.

Profit Per Pound

The amount of profit generated for each pound of product sold, used in evaluating the efficiency of production and sales.