In a Country That Produces Only Wine and Guns, Which

question 50

Multiple Choice

In a country that produces only wine and guns, which of the following is least likely to lead to biased growth?

• A)The amount of usable land has increased substantially.
• B)The relaxation of migration laws has led to a huge influx of unskilled workers.
• C)The technology used to produce guns improves while the technology used to produce wine does not change.
• D)The relative price of guns in the international market changes.

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Definitions:

Equilibrium Quantity

The amount of products or services available and sought after at the equilibrium price, where the quantity supplied matches the quantity demanded.

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded by consumers.

Transaction Costs

Expenses incurred when buying or selling goods or services, including fees, charges, and other costs associated with the transfer of assets.

Exchange

The act of giving one thing and receiving another, especially of the same type or value, in return.