A 1971 Study by Finkel and Tuttle Hypothesizes That All

question 24

Multiple Choice

A 1971 study by Finkel and Tuttle hypothesizes that all of the following variables affect the aggregate profit margin except

• A) Capacity utilization rate
• B) Unit labor costs
• C) Variable labor costs
• D) Rate of inflation
• E) Foreign competition

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Definitions:

Goods Produced

The total quantity of physical items that are manufactured or processed by a company or economy within a specific time frame.

Law of Comparative Advantage

A principle that states that individuals, firms, regions, or nations can gain by specializing in the production of goods that they produce cheaply (at a low opportunity cost) and exchanging them for goods they cannot produce cheaply (at a high opportunity cost).

Labor-Intensive Commodities

Goods that require a higher proportion of labor in their production process compared to materials and capital.

Opportunity Cost

The value of the best alternative that must be forgone as a result of choosing a particular action or decision.