Which of the following factors of production is the most important determinant of economic distance?

• A. Labor
• B. Land
• C. Transportation infrastructure
• D. Capital

Answer: (C)

Verified step by step guidance

1. Understand the concept of economic distance: Economic distance refers to the effective cost and difficulty of moving goods, services, or factors of production between locations, which affects trade and economic interactions.
2. Identify the factors of production listed: Labor, Land, Capital, and Transportation infrastructure (though transportation infrastructure is not traditionally classified as a factor of production, it plays a crucial role in economic distance).
3. Analyze how each factor influences economic distance: Labor, Land, and Capital are inputs used in production, but they do not directly reduce the cost or difficulty of moving goods or services across space.
4. Recognize that transportation infrastructure directly affects economic distance by reducing travel time and costs, thus making it the most important determinant of economic distance.
5. Conclude that while Labor, Land, and Capital are essential for production, Transportation infrastructure is the key factor that determines economic distance because it facilitates the movement and connectivity necessary for economic activity.