Question

ambrosia, a small country in the mediterranean region, has an agriculture - based economy. in recent years, a decline in global trade barriers has led to a massive increase in agricultural production in ambrosia. the government of ambrosia has claimed that this expansion has increased the countrys gdp and also improved the overall welfare of its people by increasing employment opportunities. however, critics of the government have claimed that this expansion has actually made the people of ambrosia worse off. which of the following, if true, would support the critics argument? a. increased agricultural production accounted for most of the increase in gdp. b. the expansion was made possible by an expansion of pesticide use that has damaged the natural environment. c. domestic demand for agricultural products is relatively low in comparison to worldwide demand. d. the agricultural market in ambrosia faces limited competition from the producers in other countries.

Explanation:

• Option A: Just because agricultural production accounted for most of the GDP increase doesn't mean people are worse off. It could still be beneficial for welfare if employment etc. is good.
• Option B: If the expansion was due to increased pesticide use that damaged the natural environment, this can have negative long - term impacts on the people of Ambrosia (e.g., health issues from polluted environment, loss of natural resources for future livelihoods). This supports the critics' claim that people are worse off.
• Option C: Low domestic demand compared to worldwide demand doesn't directly imply that people are worse off. It might be related to trade and production for export which could still be positive for the economy and welfare.
• Option D: Limited competition from other countries' producers is more likely to be a positive for the domestic agricultural producers (e.g., they can sell more, earn more) and not support the critics' claim.

Answer:

B. The expansion was made possible by an expansion of pesticide use that has damaged the natural environment.