Scenario: Two neighboring countries, Sweetland and Sourland, are identical in terms of size, population (800,000), education of workforce, and value of natural resources owned.
-Refer to the scenario above.Despite all inputs being equal in Sweetland and Sourland,Sweetland has many more companies competing against one another.What can we say about its GDP relative to Sourland's GDP?
A) Its GDP likely is smaller, because fewer resources are employed.
B) Its GDP likely is greater, because resources are allocated more efficiently.
C) Its GDP likely is greater, because fewer resources are employed.
D) Its GDP likely is smaller, because companies compete more fiercely for profits.

Question

Quizplus · Accepted Answer

The presence of many more companies competing against each other in Sweetland indicates that resources are allocated more efficiently, resulting in higher productivity and output. Therefore, Sweetland's GDP is likely to be greater than Sourland's GDP, despite all other inputs being equal.

Scenario: Two Neighboring Countries, Sweetland and Sourland, Are Identical in Terms