Which of the Following Is Not an Explanation for Why

question 17

Multiple Choice

Which of the following is not an explanation for why high-income and labor-saving products are most likely to be introduced in rich nations?

• A)The opportunities for doing so are the greatest in rich nations
• B)Poor countries actually prefer products and services associated with being low-income
• C)The development of new products requires proximity to markets so as to benefit from consumer feedback in modifying the product
• D)There is a need to provide service

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Definitions:

Economic Profit

The return flowing to those who provide the economy with the economic resource of entrepreneurial ability; the total revenue of a firm less its economic costs (which include both explicit costs and implicit costs); also called “pure profit” and “above-normal profit.”

Accounting Costs

The explicit costs of running a business, such as wages, rent, and materials, recorded in the financial statements.

Total Revenue

The total amount of money received by a firm from sales of its products or services before any expenses are subtracted.

Average Product

The output per unit of input, for example, the average quantity of product produced per worker or per machine.