Foreıgn Trade Deneme Sınavı Sorusu #1396899

Which of the following refers to the same amount of output increase with the increase within the factors of production?


Labor-abundant country

Capital-abundant country

Labor-intensive commodity

Capital-intensive commodity

Constant returns to scale


Yanıt Açıklaması:

Constant returns to scale refers to the same amount of output increase with the increase within the factors of production. Labor-abundant country means that the ratio of the total amount of labor to the total amount of capital available in the country is greater than the other country. On the other hand, capital-abundant country means that the ratio of the total amount of capital to the total amount of labor available in the country is greater than the other country. Labor-intensive commodity is produced with a higher (L/K) ratio than the other commodity in both countries. Capital-intensive commodity is produced with a higher (K/L) ratio than the other commodity in both countries.

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