Initially,many Foreign Factories Are Established Where

question 67

Multiple Choice

Initially,many foreign factories are established where:

• A) labour costs are high
• B) labour costs are low
• C) labour costs are on par with the manufacturer's typical costs
• D) labour intensive manufacturing is the exception rather than the norm
• E) labour is more productive

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Definitions:

Marginal Product

The boost in production one can expect by adding an extra unit of labor or capital, ceteris paribus.

Wage Rate

The amount of compensation workers receive in exchange for their labor, typically expressed per hour or per unit of work.

Capital

Financial assets or the financial value of assets, such as funds held in deposit accounts as well as the physical factors of production.

Expansion Path

A curve that shows how the input combinations of a firm change as it increases output, keeping the input ratios constant.