The Specific­factors Model Concludes That If There Is a

question 34

Multiple Choice

The specific­factors model concludes that if there is a
Decrease in relative price (and an expansion) in one
Industry, the factor specific to that industry:

• A)will experience an increase in its marginal product.
• B)will experience a decrease in its marginal product.
• C)will be transferred to other industries.
• D)will have competition as additional units of that specific factor are hired from other industries.

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Definitions:

Preferred Stock

A type of stock that gives holders preferential treatment over common stockholders, usually through dividends and upon liquidation.

Common Stock

Equity ownership in a corporation, with voting rights and potential for dividends.

Dividend

A distribution of profits by a company to its shareholders, typically in the form of a payment.

Cumulative Preferred Stock

Preferred stock where dividends accumulate if not paid as scheduled, needing to be fulfilled before common stock dividends.