One Potential Reasonable Explanation for the Leontief Paradox Is That

question 20

Multiple Choice

One potential reasonable explanation for the Leontief paradox is that

• A) The U.S. exports capital intensive goods
• B) U.S. labor is more productive than its foreign counterpart
• C) U.S. tastes were biased strongly in favor of capital intensive goods
• D) The two factor model that was used was incomplete

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Definitions:

Complex Assumptions

Assumptions in economic models that incorporate multiple variables and conditions, often to accommodate real-world complexity.

Predict Movements

The activity of forecasting the future changes or directions of variables such as prices, trends, or behaviors.

Market Economy

An economic system in which supply and demand from consumers drive the production of goods and services.

Trade-Offs

Refers to the concept of giving up one thing in return for gaining another, often used in decision making where resources are scarce.