Which of the Following Holds True for Products with Low

question 148

Multiple Choice

Which of the following holds true for products with low value-to-weight ratios?

• A)They are relatively inexpensive products.
• B)They do not weigh very much.
• C)Their transportation costs account for a very small percentage of total costs.
• D)There is great pressure to produce these products in the optimal location and to serve the world market from there.

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Definitions:

Cobb-Douglas Utility Functions

A particular form of utility function used in economics that represents preferences over two goods, characterized by their constant elasticity of substitution.

Pareto Optimal

A distribution state of resources where no adjustment can be made to better the position of any individual or evaluation criterion without negatively affecting another.

Consumption Externalities

The impact of one's consumption activities on the welfare of others that is not reflected in market prices, either positive or negative.

Competitive Equilibrium

A market state where supply equals demand, ensuring that every buyer and seller is satisfied at the current price.