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Chako Chako
wrote...
Posts: 2948
8 years ago
If the price of the capital intensive product rises more than does the price of the land intensive product, then
A) demand will shift away from the capital-intensive product, and its production will decrease relative to that of the land intensive product.
B) the relative price of the capital intensive product will fall to some point between the pretrade relative prices.
C) demand will shift away from the capital-intensive product, and its production will decrease.
D) the country that exports the capital-intensive good will lose its comparative advantage.
E) the production of the capital-intensive product will decrease, but by less than production of the land-intensive product.
Textbook 
International Economics: Theory and Policy

International Economics: Theory and Policy


Edition: 10th
Author:
Read 116 times
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Replies
wrote...
8 years ago
B
Chako Author
wrote...
8 years ago
Correct!
wrote...
8 years ago
Don't forget to vote my answer as best Nerd Face
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