Suppose That Due to a Drought, the Price of Agricultural

question 28

Multiple Choice

Suppose that due to a drought, the price of agricultural
Goods rises.If land is specific to agriculture, capital is
Specific to manufacturing, and labor is mobile between
Sectors, which of the following is TRUE?

• A)The percentage change in labor income is less than zero.
• B)The percentage change in labor income is greater than the percentage change in the relative price of
• Agricultural goods.
• C)The percentage change in labor income is greater than the percentage change in the relative price of
• Manufacturing goods.
• D)The percentage change in labor income is less than the percentage change in the relative price of
• Agricultural goods.

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Definitions:

Distinctiveness

The quality of being notably different or unique, often used in the context of stimuli in psychology to describe how easily an item stands out from others, facilitating learning and memory.

Interference

A cognitive process where previously learned information hinders the ability to learn new information or the recall of existing information.

Proactive Interference

A phenomenon where older memories interfere with the recall of newer memories.

Retroactive Interference

A phenomenon where newly learned information interferes with the recall of previously learned information.