The degree of a factor's specificity is directly related to
A) the cost of the factor as a proportion of the long-run total cost of production.
B) technology differences between two countries, with a more advanced technology resulting in more factor specificity.
C) the amount of time required to redeploy the factor to a different industry.
D) factor quality, with higher quality factors having a higher level of specificity.
E) the mobility of the factor, with more mobile factors having more specificity.

Question

Quizplus · Accepted Answer

The degree of a factor's specificity is directly related to the amount of time required to redeploy the factor to a different industry. Factors that are highly specific to a particular industry or product require significant time and investment to be redeployed to another industry or product, making them less mobile and less flexible in terms of use. This increases their degree of specificity. Factors that can be easily moved between industries or products are less specific and more flexible in use. Factors such as cost, technology, quality or mobility may also affect the degree of specificity, but they are not directly related to it.

The Degree of a Factor's Specificity Is Directly Related to