Azoo Government Projects (Scenario)

question 76

Multiple Choice

Azoo Government Projects (Scenario)
The nation of Azoo needs the assistance of a contractor to construct a new bridge and a subway system. The nation lacks the skilled labor and technical know-how to handle such large-scale projects. Representatives of the Azoo government are reviewing the project bids provided by two different international contractors. Contractor A proposes a turnkey contract for Azoo. Contractor B proposes a build-operate-transfer arrangement.
-The government of Azoo might select Contractor B in order to ________.

• A) prevent the builder from operating in the country for even a short period of time
• B) avoid rental fee, user fee, and tolls during the operational stage of the bridge and subway system
• C) build the projects cost-effectively
• D) increase the number of visitors to Azoo

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Definitions:

Labor Supply Curve

The graphical representation of the relationship between different levels of wage and the quantity of labor willing to be supplied.

Monopsony

A market situation where there is only one buyer facing many sellers.

Economic Rent

Earnings exceeding the minimum amount required to keep a factor of production in its current use.

Factor Supply

The total amount of various inputs (like labor, capital, and natural resources) available in the economy for production processes.