In the Long Run, If All Resources Can Move Within

question 52

Multiple Choice

In the long run, if all resources can move within a
Nation, an inflow of FDI will:

• A)increase production in the capital­intensive sectors as capital becomes cheaper.
• B)lower the productivity of the agricultural sector.
• C)lower wages.
• D)decrease the production of capital­intensive goods.

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Definitions:

Elastic

Describes a situation in economics where the quantity demanded or supplied of a good changes significantly in response to changes in its price.

Demand for Land

The desire or need by individuals or businesses to purchase or lease land for various uses such as agriculture, commercial, or residential purposes.

Supply of Land

The total land area that is available for a particular use, such as agriculture, industry, or housing, which is often fixed and inelastic in the short term.

MRP Curve

The marginal revenue product curve, illustrating the additional revenue generated from employing one more unit of a factor of production.