The "Leontief Paradox" Refers to the Empirical Finding Obtained by Wassily

question 2

Multiple Choice

The "Leontief paradox" refers to the empirical finding obtained by Wassily Leontief that, even though the United States was generally thought to be a relatively __________ country, it was found to be __________.

• A) capital-abundant; exporting relatively labor-intensive goods and importing
• Relatively capital-intensive goods
• B) labor-abundant; exporting relatively capital-intensive goods and importing
• Relatively labor-intensive goods
• C) skilled-labor-abundant; exporting relatively unskilled-labor-intensive goods
• And importing relatively skilled-labor-intensive goods
• D) capital-abundant; exporting relatively skilled-labor-intensive goods and
• Importing relatively unskilled-labor-intensive goods

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Definitions:

Break-Even Point

The level of production or sales at which total revenues equal total costs, resulting in no net loss or gain.

Contribution Margin Ratio

A ratio that shows the contribution margin as a percentage of total sales, indicating how much of the revenue is available to cover fixed costs and generate profit.

Fixed Expenses

Expenses that do not fluctuate with changes in production volume or sales, such as rent and salaries.

Variable Expenses

Costs that change in proportion to the level and nature of business activity, such as advertising, sales commissions, and shipping costs.