The _____ States That When Factors Are Allowed to Move

question 32

Multiple Choice

The _____ states that when factors are allowed to move freely among trading nations,efficiency increases,which leads to price of factors becoming equal among countries.

• A) factor-price equalization theory
• B) diamond theory
• C) trade policy theory
• D) managed trade theory
• E) trade deficit theory

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Definitions:

Market Wage Rate

The prevailing rate of pay for a specific job or occupation in a labor market, influenced by supply and demand for labor.

Diminishing Returns

A principle stating that as investment in a single area of production increases, the rate of return from that investment, after a certain point, begins to decrease.

Worker

A person engaged in work, especially in manual or industrial labor, often for wages.

Profit Maximizing

Profit maximizing is the process by which a firm determines the price and output level that returns the greatest profit.