Figure 11-14 Figure 11-14 Shows the Optimal Input Combinations for the Production

question 239

Multiple Choice

Figure 11-14

Figure 11-14 shows the optimal input combinations for the production of a given quantity of cotton in the United States and in China.
-Refer to Figure 11-14.Which of the following could explain why the United States and China use different input combinations to produce a given quantity of cotton and yet, each country produces that quantity at the lowest possible cost?

• A)because the prices of inputs are not the same for the two countries: labor is relatively lower-priced and capital is relatively higher priced in the United States
• B)because the prices of inputs are not the same for the two countries: labor is relatively lower-priced and capital is relatively higher priced in China
• C)because the United States has more sophisticated technology and therefore is more efficient in cotton production
• D)because the marginal product per dollar spent on capital yields a higher return in the United States than in China