One Reason Used to Explain the Leontief Paradox Observed in the Case

question 120

Multiple Choice

One reason used to explain the Leontief paradox observed in the case of the United States is that the United States

• A) imports goods that heavily use skilled labor and innovative entrepreneurship.
• B) has a special advantage in producing new products made with innovative technologies.
• C) exports heavy manufacturing products that use large amounts of capital.
• D) has a strong absolute advantage over other nations because of its advantageous factor endowments.
• E) imports goods that make intensive use of factors that are locally abundant.

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Definitions:

Special Price

A discounted or promotional pricing strategy applied to a product or service for a limited time or specific customers.

Variable Costs

Costs that vary directly with the level of production or business activity, such as raw materials and labor.

Fixed Costs

Expenses that remain constant in total regardless of changes in the level of business activity or output.

Net Income

The total amount of profits earned by a company after all expenses and taxes have been deducted from revenue.