Suppose That World Demand Shifts Away from Agricultural Goods Toward

question 74

Multiple Choice

Suppose that world demand shifts away from agricultural goods toward high-tech manufactured goods. 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 increase in capital income is less than the percentage increase in labor income.
• B) The percentage increase in labor income is more than the percentage increase in the relative price of manufacturing goods.
• C) The percentage change in capital income is greater than zero.
• D) The percentage increase in returns to land is more than the percentage increase in the relative price of manufacturing goods.

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Definitions:

Deltoid

Refers to the triangular muscle on the shoulder, involved in arm movements and known for its shape.

Circular Sphincter

A circular muscle that constricts or dilates to regulate the passage of substances through an opening in the body, such as the pyloric sphincter in the digestive system.

Peristalsis

The involuntary constriction and relaxation of the muscles of the intestine or another canal, creating wavelike movements that push the contents forward.

Sartorius

A long narrow muscle of the thigh; the longest muscle of the body.