Question

Suppose Russia produces only cars and trucks. The resources that are used in the production of these two goods are not specialized—that is, the same set of resources is equally useful in producing both trucks and cars.

Answer 1

There will be a competition in the sources of the raw materials used for trucks and cars. This will result to a high demand in these resources. When there is high demand, the supply for these resources will increase which will result to the lowering of prices.