Suppose That the Home Country in the Two-Sector (Manufacturing and Agriculture)

question 67

Multiple Choice

Suppose that the home country in the two-sector (manufacturing and agriculture) specific-factors model has a comparative advantage in manufactured output. Which specific factor(s) will gain the most after trade occurs?

• A) capital
• B) land
• C) labor
• D) land and capital

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Definitions:

Pretzels

A type of baked pastry made from dough that is commonly shaped into a knot and typically salted.

Utils

A hypothetical unit of measurement used in economics to quantify the level of utility or satisfaction gained from consuming goods and services.

Sensitivity

The degree to which something is affected by changes in external factors, often used in contexts like financial analyses, project planning, or scientific measurements.

Marginal Utility

This concept describes the additional satisfaction or utility a consumer receives from consuming one more unit of a good or service.