The Following Input-Requirements Data Are for Country A, a Capital-Abundant

question 3

Multiple Choice

The following input-requirements data are for country A, a capital-abundant country where they produce nothing but bread and wine using only capital and labor as inputs. $$\begin{array} { | c | c | c | } \hline & 1 \text { pound of bread } & \text { 1 gallon of wine } \\\hline \text { Capital input } & 5 \text { units } & 20 \text { units } \\\hline \text { Labor input } & 4 \text { units } & 10 \text { units } \\\hline\end{array}$$ Which of the following is most likely to happen if country A engages in free trade with other countries?

• A)The prices of both bread and wine will fall in the domestic market.
• B)The price of bread will fall but the price of wine will rise in the domestic market.
• C)The prices of both bread and wine will rise in the domestic market.
• D)The price of bread will rise but the price of wine will fall in the domestic market.

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Definitions:

Unsaturated Fats

A type of dietary fat, found in foods like avocados, nuts, and olive oil, that is considered healthier than saturated fats.

Saturated Fats

Types of fats commonly found in animal products and some plant oils, known to raise levels of LDL cholesterol in the blood, potentially increasing heart disease risk.

Indispensable Amino Acids

Essential amino acids that the human body cannot synthesize on its own and must be obtained through diet.

Dispensable Amino Acids

Amino acids that the body can produce itself and therefore do not need to be obtained directly through the diet.