The model used to study the earnings of resources of
Production is called:
A)comparative advantage theory.
B)absolute advantage theory.
C)specificfactors model.
D)production possibility frontier.

Question

The model used to study the earnings of resources of
Production is called:
A)comparative advantage theory.
B)absolute advantage theory.
C)specific­factors model.
D)production possibility frontier.

Quizplus · Accepted Answer

The specific-factors model is specifically designed to study the earnings of resources of production. It focuses on the interaction of two factors of production, usually capital and labor, in the production of two goods. The model assumes that one factor is specific to one good and cannot be easily moved to the production of the other good. This model highlights the importance of factor mobility and the distributional effects of international trade. The other options (comparative advantage theory, absolute advantage theory, and production possibility frontier) do not directly address the earnings of resources of production.

The Model Used to Study the Earnings of Resources of