In the Real World,why Doesn't Factor-Price Completely Equalize

question 1

Multiple Choice

In the real world,why doesn't factor-price completely equalize

• A)because in real world,there are no trade restrictions
• B)technology takes time to defuse and factor productivity remains different across countries.
• C)although labor is completely mobile it assumes the value in the country to which it moved and thus has no effect on the overall factor price of that country.
• D)due to differences in exchange rates

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Definitions:

Common Size Income Statement

A financial statement that presents all items as a percentage of a common base figure, making it easier to analyze changes and compare financial performance over time.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue, indicating financial health.

Return On Assets

A financial metric that measures the profitability of a company in relation to its total assets.

Profit Margin

A financial metric that measures the amount of net income earned with each dollar of sales by calculating the percentage of revenue that translates into profits.