Which of the Following Is NOT an Explanation of Leontief's

question 57

Multiple Choice

Which of the following is NOT an explanation of Leontief's paradox?

• A) Leontief did not distinguish between high-skilled and low-skilled labor.
• B) The United States was not engaged in completely free trade in 1947 as the Heckscher-Ohlin model assumes.
• C) The data from 1947 might be unusual because the war had recently ended.
• D) United States' trading partners gave preferential treatment to U.S. exports.

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Definitions:

Industry Concentration

The extent to which a small number of firms dominate the total sales, production, or capacity of an industry.

Economies of Scale

Operational scale brings about cost reductions for firms, with each unit's production cost decreasing as the operation's scale enlarges.

Economies of Scale

The cost advantage that arises with increased output of a product, as fixed costs are spread over more units of production.

Price Competition

A market situation where sellers compete primarily on the price of their goods or services, often leading to lower prices for consumers.