Figure 11-8

question 150

Multiple Choice

Figure 11-8
Figure 11-8 shows the optimal input combinations for the production of a given quantity of cotton in the United States and in China.
-Refer to Figure 11-8.Consider the following statements:
a.For each country,the marginal product per dollar spent on labor equals to the marginal product per dollar spent on capital.
b.The price of labor is relatively higher in the United States than in China and the price of capital is relatively lower in the United States than in China.
c.The price of labor and the price of capital are relatively higher in the United States than in China.Based on the figure,which of the statements above is true?

• A) All of the statements are true.
• B) statements a and c only
• C) statements a and b only
• D) statements b and c only

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Definitions:

Training

The process of enhancing the skills, capabilities, and knowledge of employees for the purpose of improving their job performance.

Managers

Individuals responsible for controlling or administering an organization or group of staff.

Marginal Revenue Product

The extra revenue generated by employing one more unit of a factor, such as labor or capital, holding other factors constant.

Variable Factor

An input whose quantity can change depending on the level of production or the scale of operations in the short run.