In the Specific Factors Model, Which of the Following Will

question 22

Multiple Choice

In the specific factors model, which of the following will increase the quantity of labor used in cloth production?

• A) a decrease in the price of labor
• B) an increase in the price of cloth relative to that of food
• C) an equal percentage decrease in the price of food and cloth
• D) an equal percentage increase in the price of food and cloth
• E) an increase in the price of food relative to that of cloth

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Definitions:

Marginal Revenue

The revenue gain from the sale of an additional good or service unit.

Marginal Revenue

The growth in income arising from the sale of an extra unit of a product or service.

Price Discriminate

The practice of selling the same product or service at different prices to different customers, based on factors such as willingness to pay, market segment, or purchase location.

Demand (D)

The quantity of a particular good or service that consumers are willing and able to purchase at various prices during a certain period of time.