The following input-requirements data are for Country A, a capital-abundant country that produces nothing but bread and wine using only capital and labor as inputs. 1 Pound of Bread1 Gallon of WineCapital Input5 units2 unitsLabor Input4 units1 unit Which of the following is most likely to happen if Country A engages in free trade with other countries?
A. The prices of both bread and wine will fall in the domestic market.
B. The price of bread will rise but the price of wine will fall in the domestic market.
C. The price of bread will fall but the price of wine will rise in the domestic market.
D. The prices of both bread and wine will rise in the domestic market.
Answer: C
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