Which of the Following Is an Example of the Law

question 61

Multiple Choice

Which of the following is an example of the law of one price in action?

• A) Prices are just one of the many factors that firms use when deciding where to locate production.
• B) If one county has a comparative advantage in producing a particular good, another country must have a comparative advantage in producing another good.
• C) Wages in India are lower than wages in the United States, and so firms move their call centers to India. This tends to raise wages in India and depress wages in the United States.
• D) Because most industries in the United States are dominated by one or two firms, the dominant firm sets the price and other firms in the industry follow.

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Definitions:

Consumer Demands

The needs or desires of consumers for products or services that drive the market demand.

Parallelism

The use of components in a sentence that are grammatically the same, or similar in construction, sound, meaning, or meter.

Transportation Costs

Expenses associated with the movement of goods or individuals from one location to another, including fares, fuel, and maintenance.

Recreation Costs

Expenses associated with activities undertaken for enjoyment, relaxation, or leisure.