In the long run, which of the following will occur if the U.S. federal government eliminates restrictions on migration of Mexican workers to the United States?
a. The United States' total K/L ratio will rise.
b. Mexico's total K/L ratio will fall.
c. Wages of American workers who compete with Mexican workers for jobs will rise.
d. The returns to U.S. owners of capital will remain unchanged.
Ans: d. The returns to U.S. owners of capital will remain unchanged.
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If a technological change occurs such that the production function shifts from q = 10K0.5 L0.5 to q = 10.5K0.3 L0.5, then the technological change is
A) both neutral and non-neutral. B) neutral. C) non-neutral. D) Not enough information given.
The demand for a good is more price elastic
a. the shorter the time the consumer has to adjust to price changes b. the lower the price of the good c. the fewer the number of good substitutes d. the less essential the nature of the good e. if the supply is more price elastic
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD1 the result in the long run would be:
A. P4 and Y1. B. P4 and Y2. C. P5 and Y1. D. P5 and Y2.
The following graph is the production possibility curve for a three-person economy, with workers Janna, Drew, and Kari.
Who has the greatest comparative advantage in rice production?
A. Drew B. Kari C. Janna D. None of them