Refer to the Scenario Above

question 75

Multiple Choice

Refer to the scenario above.It is found that a one-unit increase in capital leads to a higher increase in the production of good X in Farm Country than in Industry Country.Why might this be the case if both countries have the same amount of total efficiency units of labor?

• A) Physical capital stock is smaller in Farm Country.
• B) Increase in output is greater if more capital is used in production.
• C) Physical capital stock is greater in Farm Country.
• D) Increase in output is smaller if less capital is used in production.

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Definitions:

Legal Services

Professional assistance provided by a qualified lawyer or law firm to advise or represent clients in legal matters.

Assembly Line Operations

Production processes where products are assembled in a sequential manner along a conveyor belt or line.

Material Requirements Planning

An inventory management system that determines the quantity and timing of raw materials needed for production to meet demand while minimizing stock levels.

Time And Motion Studies

The analysis of work processes to increase efficiency by reducing wasted time and motion.