Scenario: Farm Country and Industry Country Are Two Neighboring Countries

question 187

Multiple Choice

Scenario: Farm Country and Industry Country are two neighboring countries. Both countries produce only one good: good X. Production in both countries is a function of total efficiency units of labor and physical capital stock.
-Refer to the scenario above.What will likely happen if there is an increase in entrepreneurial activity in Industry Country?

• A) Output will remain bigger than in Farm Country.
• B) Income per capita will fall in Industry Country.
• C) Productivity in Industry Country will increase.
• D) Farm Country will have relatively greater output because its firms face less competition.

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Definitions:

Macrosystem

The outermost layer in Bronfenbrenner's ecological systems theory, encompassing the cultural, social, economic, and political contexts that shape an individual's development.

Political Processes

The methods and strategies used by individuals and groups to exert influence over political systems, including elections, policymaking, and governance.

Historical Setting

The specific time period and location in which events occur or are situated, often used to provide context in literature, research, or history.

Exosystems

In ecological systems theory, exosystems refer to social settings that indirectly affect an individual's development, even though the person may not be directly involved in such settings.