Hong Kong Is Relatively Abundant in Labor,while Canada Is Relatively

question 119

Multiple Choice

Hong Kong is relatively abundant in labor,while Canada is relatively abundant in capital.In both countries the production of shirts is relatively more labor intensive than the production of computers.According to the factor endowment theory,Hong Kong will have a(n) :

• A) Absolute advantage in the production of shirts and computers
• B) Absolute advantage in the production of computers
• C) Comparative advantage in the production of shirts
• D) Comparative advantage in the production of computers

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Definitions:

Private Buyers

Individuals or entities that purchase goods or services for personal use or for a private collection, not for resale or commercial purposes.

Parity Ratio

A measure used to compare the price or value of one thing to another, often in agriculture to compare prices of farm products to other goods and services over time.

Parity Price

Parity price is a price level that ensures farmers receive a relative value for their commodities comparable to the purchasing power of a certain base period.

Price Elasticity

The measure of demand fluctuation as a response to changing prices of a good.