The main cause of different relative costs between countries are ?
Correct answer: D. relative factor endowments
- A. relative factor competition
- B. relative factor mobility
- C. relative factor substitution
- D. relative factor endowments
Explanation
Countries have different relative costs mainly because they possess different relative quantities of land, labour, capital and other productive resources. These differences in factor endowments create comparative advantage.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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