The Shipbreakers of Alang Represent a Perfect Example of How

question 21

Multiple Choice

The Shipbreakers of Alang represent a perfect example of how a developing country can apply the principles of the Heckscher-Ohlin model, since

• A) shipbreaking is generally considered to be a capital-intensive operation and India, being a large country has much capital.
• B) shipbreaking is a labor-intensive operation in India, and India has many workers since it is such a large country.
• C) shipbreaking is a labor-intensive operation in India, and India's availability of capital per worker is less than that of its trade partners.
• D) shipbreaking is a capital-intensive operation elsewhere in the world, and therefore represents a case of a factor intensity reversal.
• E) India's climate lends itself to the work involved in shipbreaking.

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Definitions:

Carrying Cost

The total cost of holding inventory, including storage, insurance, depreciation, and opportunity costs.

Safety Stock

The additional quantity of inventory kept on hand to prevent stockouts caused by variability in demand or supply chain disruptions.

Lead Time

The duration between the initiation and completion of a production process or the time from ordering to delivery of a product.

Setup Cost

Expenses incurred to prepare or configure a process, machine, or system for production or operation.