Using the Specific Factors Model,assume That Strawberry Production Requires the Specific

question 63

Multiple Choice

Using the specific factors model,assume that strawberry production requires the specific factor of land,tractor production requires the specific factor of capital,and labor is variable.If the United States is capital abundant compared to Mexico,and Mexico is land abundant compared to the United States,then in the short run with trade we would expect

• A)the income of U.S. land owners to increase.
• B)the income of U.S. workers to increase.
• C)the income of Mexican workers to increase.
• D)the income of Mexican land owners to increase.

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Definitions:

Marginal Cost

The expense associated with manufacturing an additional unit of a product or service.

Price Reduction

A decrease in the cost of goods or services, often used as a strategy to increase demand or sales.

Unsold Donuts

The quantity of donuts that remain unsold at the end of a selling period, signifying excess supply or lack of demand.

Marginal Benefit

The added value or usefulness experienced when one more unit of a good or service is consumed.