A Temporary Factor-Price Differential Is One Which

question 93

Multiple Choice

A temporary factor-price differential is one which

• A)will tend to be eliminated in the long run.
• B)will hamper the reallocation of resources from declining to growing industries.
• C)derives from intrinsic differences in the factors themselves.
• D)will reflect a permanent state of disequilibrium.
• E)is seldom self-eliminating.

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Definitions:

Production Possibilities

The different combinations of goods and services that an economy can produce given its available resources and technology.

Fish

Aquatic animals that are typically covered with scales and have gills for breathing in water.

Coconuts

The large, brown, hard-shelled seeds of the coconut palm, known for their edible white flesh and water, and used in various culinary and non-culinary applications.

Produces

The act of creating or manufacturing goods and services to meet consumer demand.