Effective factor endowment is Group of answer choices the amount of factor available in a given country multiplied by the productivity of this factor the productivity of a factor in a given country the amount of factor actually employed in production the amount of factor available in a given country
Question
Effective factor endowment is Group of answer choices
the amount of factor available in a given country multiplied by the productivity of this factor
the productivity of a factor in a given country
the amount of factor actually employed in production
the amount of factor available in a given country
Solution
The correct answer is "the amount of factor available in a given country multiplied by the productivity of this factor."
Here's why:
Effective factor endowment refers to the total productive capacity of a factor of production in a given country. It takes into account not only the amount of the factor available, but also how productively that factor can be used. Therefore, it is calculated by multiplying the amount of the factor available by the productivity of that factor.
The other options are not correct because:
- The productivity of a factor in a given country is just one component of effective factor endowment. It does not take into account the amount of the factor available.
- The amount of factor actually employed in production is not necessarily the same as the effective factor endowment. The effective factor endowment refers to the total productive capacity, not just the amount currently being used.
- The amount of factor available in a given country is also just one component of effective factor endowment. It does not take into account the productivity of that factor.
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