Suppose two countries use different combinations of inputs, such as labour and capital, to produce the same product.This implies all of the following except that
A)the two countries use different technologies to produce the product.
B)the inputs are not equally productive in the two countries.
C)the prices of the inputs are not the same in the countries.
D)one country is more efficient in the production of the good than the other.

Question

Quizplus · Accepted Answer

The fact that two countries use different combinations of inputs to produce the same product does not necessarily mean that one country is more efficient than the other. It simply means that they have different factor endowments and production technologies. Efficiency can only be determined by comparing the output level achieved with a given set of inputs, which may or may not be the same in both countries.

Suppose Two Countries Use Different Combinations of Inputs, Such as Labour