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As Relative Prices in Various Industries Change Due to Trade

Question 55

Multiple Choice

As relative prices in various industries change due to trade, the marginal product of the mobile resources used in the expanding industry __________, and the marginal product of the mobile resources used in the contracting industry __________.


A) rises; falls
B) falls; rises
C) remains the same; remains the same
D) changes by exactly the same percentage; changes by exactly the same percentage

Correct Answer:

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