European countries fell in between, with land in the United Kingdom about twice as abundant as on the continent. These differences in endowments were reflected in massive differences in factor prices. In Japan, a worker had to work nearly 2,000 days to buy a hectare of land, while his counterpart in the United States needed to work only one-tenth of that time.
A third effect, discussed in detail in the next section, is that higher capital costs produce a bias in mechanization toward power-intensive operations. Finally, higher capital costs influence the design of machines; if repair costs are relatively low, designs emphasize repair over durability.

Sponsored

European countries fell in between, with land in the United Kingdom about twice as abundant as on the continent. These differences in endowments were reflected in massive differences in factor prices. In Japan, a worker had to work nearly 2,000 days to buy a hectare of land, while his counterpart in the United States needed to work only one-tenth of that time.
A third effect, discussed in detail in the next section, is that higher capital costs produce a bias in mechanization toward power-intensive operations. Finally, higher capital costs influence the design of machines; if repair costs are relatively low, designs emphasize repair over durability.

Source 1 | Source 2 | Source 3

Facebook Comments