Canada has a much lower population density than does Japan.Therefore,the price of land (relative to the price of labour)is lower in Canada than in Japan.Consider a Canadian firm and a Japanese firm,both producing rice,both having access to the same technologies,and both striving to minimize their costs.The Canadian firm will use the two inputs,land and labour,in such a way that its land/labour ratio is
A)lower than that of the Japanese firm.
B)indeterminate as there is insufficient information to know.
C)equal to that of the Japanese firm.
D)equal to one.
E)higher than that of the Japanese firm.

Question

Quizplus · Accepted Answer

The Canadian firm will use more land relative to labor because land is cheaper in Canada compared to Japan, leading to a higher land/labour ratio.

Canada Has a Much Lower Population Density Than Does Japan