A situation in which one nation produces good A using labor more intensively (relative to capital) than good B while a second nation produces good A, using capital more intensively (relative to labor) than good B is called:
A) a reversal of factor intensities.
B) a paradox of factor intensities.
C) backward technology.
D) micro intensity.

Question

Quizplus · Accepted Answer

This situation is called a reversal of factor intensities, where the relative factor intensities used in producing two goods are reversed between two countries. In one country, labor is more intensively used to produce one good, while in the other country, capital is more intensively used to produce the same good.

A Situation in Which One Nation Produces Good a Using