The Following Input-Requirements Data Are for Country A, a Capital-Abundant

Multiple Choice

The following input-requirements data are for country A, a capital-abundant country where they produce nothing but bread and wine using only capital and labor as inputs. $$\begin{array} { | c | c | c | } \hline & 1 \text { pound of bread } & \text { 1 gallon of wine } \\\hline \text { Capital input } & 5 \text { units } & 20 \text { units } \\\hline \text { Labor input } & 4 \text { units } & 10 \text { units } \\\hline\end{array}$$ In the long run, which of the following can most reasonably be inferred after this country engages in free trade?

A) The wage rates will decline but the returns to capital will increase.
B) The returns to capital will decline but the wage rates will increase.
C) The wage rates will decline in the wine industry and will increase in the bread industry.
D) The returns to capital will fall in the wine industry and will rise in the bread industry.