If the Price of the Capital Intensive Product Rises More

question 6

Multiple Choice

If the price of the capital intensive product rises more than does the price of the land intensive product,then

• A) the relative price of the capital intensive product will fall to some point between the pretrade relative prices.
• B) demand will shift away from the capital-intensive product, and its production will decrease.
• C) demand will shift away from the capital-intensive product, and its production will decrease relative to that of the land intensive product.
• D) the production of the capital-intensive product will decrease, but by less than production of the land-intensive product.
• E) the country that exports the capital-intensive good will lose its comparative advantage.

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Definitions:

Long-Term Memory

A type of storage in the brain capable of holding information for long periods, from hours to a lifetime.

Primary Memory

Also known as short-term memory, it is the component of the mind responsible for the transient holding of information.

Long-Term Memory

The stage of the memory process that is capable of storing information for extended periods, from hours to a lifetime.

Short-Term Memory

The part of the memory system where information is stored for short periods, typically seconds to minutes, before being forgotten or transferred to long-term memory.