Biology Forums - Study Force

Figure 11-14

Figure 11-14 shows the optimal input combinations for the production of a given quantity of cotton in the United States and in China.

Refer to Figure 11-14. Consider the following statements:

Based on the figure, which of the statements above is true?

All of the statements are true.

statements a and b only

statements b and c only

statements a and c only

Figure 11-14

Figure 11-14 shows the optimal input combinations for the production of a given quantity of cotton in the United States and in China.

Refer to Figure 11-14. Which of the following could explain why the United States and China use different input combinations to produce a given quantity of cotton and yet, each country produces that quantity at the lowest possible cost?

because the marginal product per dollar spent on capital yields a higher return in the United States than in China

because the United States has more sophisticated technology and therefore is more efficient in cotton production

because the prices of inputs are not the same for the two countries: labor is relatively lower-priced and capital is relatively higher priced in the United States

because the prices of inputs are not the same for the two countries: labor is relatively lower-priced and capital is relatively higher priced in China

because the prices of inputs are not the same for the two countries: labor is relatively lower-priced and capital is relatively higher priced in China