Multiple Choice
In the following diagram showing the relationship between the price of good X relative to the price of good (PX/PY) and the wage rate relative to the return to capital or rental rate on capital (w/r) ,
![In the following diagram showing the relationship between the price of good X relative to the price of good (P<sub>X</sub>/P<sub>Y</sub>) and the wage rate relative to the return to capital or rental rate on capital (w/r) , good X is the relatively __________ good at (w/r) values less than (w/r) , and good X is __________ good at (w/r) values greater than (w/r) . [Note: The (P<sub>X</sub>/P<sub>Y</sub>) associated with (w/r) is the highest (P<sub>X</sub>/P<sub>Y</sub>) on the graph.] A) labor-intensive; also the relatively labor-intensive B) labor-intensive; the relatively capital-intensive C) capital-intensive; the relatively labor-intensive D) capital-intensive; also the relatively capital-intensive](https://d2lvgg3v3hfg70.cloudfront.net/TB1413/11eae5e0_9ce6_1235_bcb4_8378ce1bc083_TB1413_00.jpg)
good X is the relatively __________ good at (w/r) values less than (w/r) , and good X is __________ good at (w/r) values greater than (w/r) . [Note: The (PX/PY) associated with (w/r) is the highest (PX/PY) on the graph.]
A) labor-intensive; also the relatively labor-intensive
B) labor-intensive; the relatively capital-intensive
C) capital-intensive; the relatively labor-intensive
D) capital-intensive; also the relatively capital-intensive
Correct Answer:
Verified
Correct Answer:
Verified
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