The implication of Prebisch-Singer Hypothesis is: a) Raw materials and labour intensive goods are exported by the developing countries b) That because the price elasticity of demand for primary goods is relatively inelastic, it is pointless for developing countries to seek to export these. c) That because the income elasticity of demand for primary goods is inelastic, over time there will be a decline in primary commodity prices and therefore the incomes derived from primary goods. d) Trade will always be mutually beneficial between a developed and a developing country as long as they both seek to exploit their comparative advantages.

The implication of Prebisch-Singer Hypothesis is: a) Raw materials and labour intensive goods are exported by the developing countries b) That because the price elasticity of demand for primary goods is relatively inelastic, it is pointless for developing countries to seek to export these. c) That because the income elasticity of demand for primary goods is inelastic, over time there will be a decline in primary commodity prices and therefore the incomes derived from primary goods. d) Trade will always be mutually beneficial between a developed and a developing country as long as they both seek to exploit their comparative advantages.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The implication of Prebisch-Singer Hypothesis is:
a) Raw materials and labour intensive goods are exported by the developing countries
b) That because the price elasticity of demand for primary goods is relatively inelastic,
it is pointless for developing countries to seek to export these.
c) That because the income elasticity of demand for primary goods is inelastic, over
time there will be a decline in primary commodity prices and therefore the incomes
derived from primary goods.
d) Trade will always be mutually beneficial between a developed and a developing
country as long as they both seek to exploit their comparative advantages.

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