5/2 Application #1

Use the information provided to answer the questions.

• Country X:

• Land: Very little arable (farmable) open land, a few large cities, access to cheap energy and textiles (fabrics)

• Labor: very few educated workers, largely unskilled labor force

• Capital: some access to foreign capital, weak banking system

• Entrepreneurship: Many people are very poor and therefore risk-averse (afraid of risk)

• What do you think the economy of this country will look like (type)? Will they probably create mostly goods or services? What kinds of goods or services might they create? Why?