In recent years, economists have begun to use height as a measure of health and, indirectly, general well-being. Overtime, p
eople in high-income countries have, on average, becometaller, just as people in high-income countries today are taller than people in low-income countries. An analysis of economic indicators suggests that Country A has recorded remarkable growth for the last 50 years. A student of economics, who analyzes the economic data as part of his college project, comes to the conclusion that the average height of the country's population should have increased during this period. Which of the following, if true, would undermine hisconclusion?
A.
Nutritionists believe that people with access to healthy food often choose less healthy alternatives when economic conditions are difficult.
B.
During this period, the populations of several low-income countries suffered from periodic epidemic attacks.
C.
The government has been firm in its stance of not allowing international fast food chains to operate inside the country.
D.
The country imposed a single-child per family law thirty years ago.
E.
Faced with a negative population growth rate, the country relaxed immigration control norms 25 years ago.
E. Faced with a negative population growth rate, the country relaxed immigration control norms 25 years ago.
Explanation:
Given that<u> immigrants increase the population</u> and that they may come from a less healthy environment, having a less healthy background is very common for them. Even if the domestic population had a high average height, t<u>he mean value will surely decrease</u> to the lower height of the immigrants.
Therefore, a correlation between economic growth and average health measured by height can be undermined, given E) is true.
Smaller companies with smaller production processes have higher per unit costs than larger companies. - smaller firms find it harder to adopt economies of scale to reduce costs.
Over time, a firm takes control of 85% of the world’s supply of a chemical used in the production of plastic. - the firm has almost total control over a scarce resource, and new competitors have to scramble for the remaning 15%. (note: this is a natural barrier to entry as long as the pharmaceutical company did not collude with the government to reach such a high market share, in said case, it would be an artificial barrier to entry).
Lenders are hesitant to provide funding for new firms that will compete with a large, well-established firm. - a small firm may lack market credibility in the financial markets, because investors are hesitant about the future of the company, or do not expect high rates of return.
As Newtech Inc. has hired John for the position of a software programmer to work on their new project. Salary paid to John by Newtech Inc. would be direct cost. Direct costs are the costs which can be tied directly to the manufacturing of products and services and they can be traced very easily as well. Labor cost, commissions, manufacturing supplies, direct material are the direct costs which can traced back to the manufacturing products quite easily.
