In the Following Diagram Showing the Relationship Between the Price

question 9

Multiple Choice

In the following diagram showing the relationship between the price of good X relative to the price of good (P_X/P_Y) and the wage rate relative to the return to capital or rental rate on capital (w/r) ,

good X is the relatively __________ good at (w/r) values less than (w/r) , and good X is __________ good at (w/r) values greater than (w/r) . [Note: The (P_X/P_Y) associated with (w/r) is the highest (P_X/P_Y) on the graph.]

• A) labor-intensive; also the relatively labor-intensive
• B) labor-intensive; the relatively capital-intensive
• C) capital-intensive; the relatively labor-intensive
• D) capital-intensive; also the relatively capital-intensive

---

Definitions:

Work in Process

Inventory that is in the production process but is not yet completed.

Processing Department

A division within a manufacturing facility where a specific type of production or activity takes place.

Equivalent Units

A concept used in process costing that converts partially completed units into a number of equivalent fully completed units.

Processing Department

A division or area in a manufacturing facility where a specific type of operation or process is carried out on a product as it moves towards completion.