The Two-Sector (Manufacturing and Agriculture) Specific-Factors Model Is Termed a "Short-Run

question 15

Multiple Choice

The two-sector (manufacturing and agriculture) specific-factors model is termed a "short-run" model because:

• A) labor cannot move from one activity to another.
• B) land resources can move from one activity to another.
• C) labor can move from one activity to another.
• D) land and capital cannot move from one activity to another.

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Definitions:

Produce

To create, manufacture, or cultivate goods, especially agricultural products, for consumption or use.

Labor

The use of human physical and mental capabilities to generate goods and services.

Profit Maximization

The process or strategy a firm uses to achieve the highest possible profit from its operations.

Wage

The monetary compensation paid by employers to employees in exchange for their labor, typically calculated on an hourly, daily, or piece work basis.