Automobiles and Many Other Products Are Differentiated

question 127

Multiple Choice

Automobiles and many other products are differentiated.As a result

• A)different countries may each have a comparative advantage in producing different types of automobiles.
• B)consumers of automobiles have difficulty deciding what type of imported automobile to buy.
• C)the quality of imported automobiles is less than it could be.
• D)we see countries specializing completely in the production of automobiles.

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Definitions:

Wage Rate

The standard amount of pay given for work performed, typically expressed in terms of pay per hour or pay per unit of work done.

Productivity

Productivity measures the efficiency of production in terms of the amount of output produced per unit of input used.

Derived Demand

The demand for a good or service that arises from the demand for another good or service. For example, demand for steel is derived from the demand for cars.

MPP

"MPP" is typically understood as "Marginal Physical Product," which refers to the additional output resulting from the use of one more unit of a variable input, holding all other inputs constant.