Question

The country of Gerance produces two goods, cars and wine. Last year, it produced 1,000 cars and 15,000 cases of wine. This year, it produced 1,300 cars and 20,000 cases of wine. Given no other information, which of the following events could not explain this change?

A) Gerance experienced a reduction in unemployment.
B) Gerance experienced an improvement in car-making technology.
C) Gerance acquired more resources.
D) Any of these events could explain the change.

Answer 1

Answer: D. Any of these events could explain the change.

Explanation: The country of Gerance produced 1000 cars and 15000 cases of wine the previous year and now 1300 cars and 20000 cases of wine this year. With this information we can deduce the following :

Increased production, which could be due to increased manpower or work force, hence reducing unemployment.

Increase in car production, probably due to improved technology.

More resources acquired, thus leading to increased production of both wine cases and cars.