increased domestic production.
D) prices for the products produced by the country will remain the same and the country's gains from trade will remain the same.
4 If there is ____________________ growth within a country, the expansion of production favors producing more of some products than other products. C A) balanced B) moderate C) biased D) negative
5 The Rybczynski theorem says that in a two-good world, assuming that product prices are constant, growth in one factor of production has two effects: A
A) increase in the output of the good that uses the growing factor intensively and decrease in the output of the other good.
B) increase in the output of the good that uses the growing factor intensively and decrease in the country's terms of trade.
C) increase in the output of any good that uses the growing factor and no effect on production of other goods.
D) increase in the output of any good that uses the growing factor and decrease in the total production of the country.
6 The Rybczynski theorem suggests that the development of new sources of a natural resource in a country that exports that natural resource: D
A) will increase overall production in that country.
B) may put pressure on the country to increase both exports and imports. C) will decrease overall production in the country.
D) may retard the development of other lines of production in that country.
7 Changes in a country's willingness to engage in trade: C
A) will increase the prices of all goods manufactured in the country to the extent that those goods are exported.
B) will decrease imports and increase prices of imported goods until i