Chapter 3: Problem 19

The main reason the American farmer can produce more than the farmer in China is that he or she (LO6) a) has more land b) has more capital c) has more labor d) is better trained

Short Answer

Expert verified

The correct answer is (b) has more capital. Greater capital allows the American farmer to invest in better machinery, infrastructure, and other agricultural technologies, which significantly increases their productivity compared to farmers in China with less capital.

Step by step solution

Understanding the concepts

Before answering the question, it's essential to understand the following concepts: - Land: Refers to the area used for agricultural purposes - Capital: Refers to financial resources, machinery, and other equipment - Labor: Refers to the number of workers and their skills - Training: Refers to the knowledge and expertise gained through education or experience Now let's evaluate each answer option.

Evaluating option (a)

Option (a) suggests that the American farmer produces more because they have more land. It's true that having more land can lead to higher production, but this doesn't always guarantee higher productivity. A farmer with a smaller land area but more advanced techniques and resources can be more productive than a farmer with larger land but outdated techniques.

Evaluating option (b)

Option (b) suggests that the American farmer produces more because they have more capital. Greater capital allows the American farmer to invest in better machinery, infrastructure, and other agricultural technologies which can significantly increase productivity.

Evaluating option (c)

Option (c) suggests that the American farmer produces more because they have more labor. Having more labor can increase production, but the impact on productivity depends on how efficiently the labor is used. In many cases, increasing productivity is related more to the efficient use of labor than the number of workers.

Evaluating option (d)

Option (d) suggests that the American farmer produces more because they are better trained. Better training can be crucial for increasing productivity as it equips farmers with knowledge of efficient farming techniques, the latest technologies, and business skills to manage their operations.

Choosing the best answer

Though each option has some merit in explaining a reason for higher productivity, option (b) is the most compelling answer. Having more capital allows American farmers to invest in better agricultural tools, technologies and resources, which significantly increases their productivity compared to farmers in China with less capital. Thus, the correct answer is: (b) has more capital.

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