Question 1

The effect of trade on specialized employees of import- competing industries will be jobs and _ pay because they are relatively _ .

Accepted Answer

Specialized employees in import-competing industries are likely to face fewer job opportunities and lower pay due to increased competition from imports, and they are relatively immobile due to their specialized skills.

Question 2

Economists consider the effects of free trade on income distribution to be important than the effects on overall welfare because .

Accepted Answer

The answer of Economists consider the effects of free trade...

Question 3

In the specific factors model,which of the following will increase the quantity of labor used in food production?

Accepted Answer

An increase in the price of food relative to that of cloth will make food production more profitable, leading to an increase in the quantity of labor used in food production as producers seek to maximize profits.

Question 4

Those who will lose from free trade are factors in sectors that produce goods that are .

Accepted Answer

Factors in sectors that produce goods that are immobile and also imported will lose from free trade because they cannot easily move to other sectors and face competition from cheaper imported goods.

Question 5

In the specific factors model,a 5% decrease in the price of food accompanied by a 5% decrease in the price of cloth will cause in the welfare of labor,in the welfare of the fixed factor in the production of food,and in the welfare of the fixed factor in the production of cloth.

Accepted Answer

In the specific factors model, if both prices decrease by the same percentage, the relative prices remain unchanged, leading to no change in the welfare of labor and the fixed factors.

Question 6

Under perfect competition,the equilibrium price of labor used to produce cloth will be equal to

Accepted Answer

The answer of Under perfect competition,the equilibrium price of labor...

Question 7

In the specific factors model,a 5% increase in the price of food accompanied by a 0% increase in the price of cloth will cause wages to _,the production of cloth to _,and the production of food to .

Accepted Answer

In the specific factors model, an increase in the price of food raises the return to the specific factor used in food production, leading to an increase in wages, but by less than the percentage increase in the price of food. This causes resources to shift towards food production, increasing it, while cloth production decreases.

Question 8

In the specific factors model,a 5% increase in the price of food accompanied by a 10% increase in the price of cloth will cause in the welfare of labor,in the welfare of the fixed factor in the production of food,and in the welfare of the fixed factor in the production of cloth.

Accepted Answer

The answer of In the specific factors model,a 5% increase...

Question 9

The slope of a country's production possibility frontier is equal to _ and the optimal production point is located where the slope is equal to .Assume that output of good Y is measured on the vertical axis,output of good X is measured on the horizontal axis,MPL is the marginal product of labor with a subscript indicating which good,P is the price of a good,and w is the wage rate.

Accepted Answer

The slope of the production possibility frontier is equal to the ratio of the marginal product of labor in the two sectors, MPLY/MPLX. The optimal production point is located where the slope of the production possibility frontier is equal to the ratio of the prices of the two goods, -PX/PY.

Question 10

In the four- quadrant diagram of the specific factors model,the graph in the upper left quadrant is a country's

Accepted Answer

The answer of In the four- quadrant diagram of the...

Question 11

In the specific factors model,a 5% increase in the price of food accompanied by a 5% increase in the price of cloth will cause wages to _,the production of cloth to _,and the production of food to .

Accepted Answer

In the specific factors model, if both goods' prices increase by the same percentage, wages will increase by that percentage, and production levels will remain unchanged as relative prices and resource allocation do not change.

Question 12

A country's budget constraint states that

Accepted Answer

Whether or not a country engages in trade, the value of goods consumed must be equal to the value of goods produced.

Question 13

When a country's labor market is in equilibrium in the specific factors model,the wage rate

Accepted Answer

In the specific factors model, labor is mobile between sectors, leading to an equalization of the wage rate across sectors when the labor market is in equilibrium.

Question 14

In the specific factors model,a 5% increase in the price of food accompanied by a 5% increase in the price of cloth will cause in the welfare of labor,in the welfare of the fixed factor in the production of food,and in the welfare of the fixed factor in the production of cloth.

Accepted Answer

In the specific factors model, if both prices increase by the same percentage, the real wage of labor remains unchanged, and the welfare of the fixed factors in both sectors also remains unchanged.

Question 15

In the specific factors model,a 0% increase in the price of food accompanied by a 5% increase in the price of cloth will cause wages to _,the production of cloth to _,and the production of food to .

Accepted Answer

In the specific factors model, an increase in the price of cloth will lead to an increase in wages, but by less than the percentage increase in the price of cloth. This is because labor is mobile and will move towards the cloth sector, increasing its production, while the production of food will decrease due to labor moving away from it.

Question 16

In the specific factors model,which of the following will increase the quantity of labor used in cloth production?

Accepted Answer

An increase in the price of cloth relative to that of food makes cloth production more profitable, leading firms to demand more labor for cloth production.

Question 17

A country's budget constraint states that

Accepted Answer

The answer of A country's budget constraint states that
...

Question 18

Economists consider the effects of free trade on income distribution to be important than the effects on overall welfare because .

Accepted Answer

The answer of Economists consider the effects of free trade...

Question 19

The slope of a country's production possibility frontier with cloth measured on the horizontal and food measured on the vertical axis in the specific factors model is equal to and it as more cloth is produced.

Accepted Answer

The slope of the production possibility frontier is equal to the ratio of the marginal product of labor in food production (MPLF) to the marginal product of labor in cloth production (MPLC). As more cloth is produced, the marginal product of labor in cloth production will decrease, causing the slope of the production possibility frontier to become steeper.

Question 20

The slope of a country's production possibility frontier with cloth measured on the horizontal and food measured on the vertical axis in the Ricardian model is equal to and it as more cloth is produced.

Accepted Answer

In the Ricardian model, the slope of the production possibility frontier (PPF) is determined by the opportunity cost, which is the ratio of the marginal products of labor (MPL). Since the PPF is a straight line in the Ricardian model, the slope is constant and equal to MPLF/MPLC.

Quiz 4: Specific Factors and Income Distribution

The effect of trade on specialized employees of import- competing industries will be jobs and _ pay because they are relatively _ .

Economists consider the effects of free trade on income distribution to be important than the effects on overall welfare because .

In the specific factors model,which of the following will increase the quantity of labor used in food production?

Those who will lose from free trade are factors in sectors that produce goods that are .

In the specific factors model,a 5% decrease in the price of food accompanied by a 5% decrease in the price of cloth will cause in the welfare of labor,in the welfare of the fixed factor in the production of food,and in the welfare of the fixed factor in the production of cloth.

Under perfect competition,the equilibrium price of labor used to produce cloth will be equal to

In the specific factors model,a 5% increase in the price of food accompanied by a 0% increase in the price of cloth will cause wages to _,the production of cloth to _,and the production of food to .

In the specific factors model,a 5% increase in the price of food accompanied by a 10% increase in the price of cloth will cause in the welfare of labor,in the welfare of the fixed factor in the production of food,and in the welfare of the fixed factor in the production of cloth.

In the four- quadrant diagram of the specific factors model,the graph in the upper left quadrant is a country's

In the specific factors model,a 5% increase in the price of food accompanied by a 5% increase in the price of cloth will cause wages to _,the production of cloth to _,and the production of food to .

A country's budget constraint states that

When a country's labor market is in equilibrium in the specific factors model,the wage rate

In the specific factors model,a 5% increase in the price of food accompanied by a 5% increase in the price of cloth will cause in the welfare of labor,in the welfare of the fixed factor in the production of food,and in the welfare of the fixed factor in the production of cloth.

In the specific factors model,a 0% increase in the price of food accompanied by a 5% increase in the price of cloth will cause wages to _,the production of cloth to _,and the production of food to .

In the specific factors model,which of the following will increase the quantity of labor used in cloth production?

A country's budget constraint states that

Economists consider the effects of free trade on income distribution to be important than the effects on overall welfare because .

The slope of a country's production possibility frontier with cloth measured on the horizontal and food measured on the vertical axis in the specific factors model is equal to and it as more cloth is produced.

The slope of a country's production possibility frontier with cloth measured on the horizontal and food measured on the vertical axis in the Ricardian model is equal to and it as more cloth is produced.