In the specificfactors model, an increase in the price of the manufactured good will cause:
a. a decrease in nominal wages in both the agricultural and manufacturing sectors.
b. an increase in real wages in both the agricultural and manufacturing sectors.
c. an increase in both nominal and real wages in both the agricultural and manufacturing sectors.
d. an increase in nominal wages in both the agricultural and manufacturing sectors.
Ans: d. an increase in nominal wages in both the agricultural and manufacturing sectors.
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As a general rule, an increase in the capital available to a society
A. reduces the slope of the production possibilities frontier, making it shallower. B. increases the slope of the production possibilities frontier, making it steeper. C. shifts the production possibilities frontier outward, away from the origin. D. shifts the production possibilities frontier inward, toward the origin. E. makes the production possibilities frontier more bowed out.
According to the principle of diminishing returns, if the number of workers is increased beyond the point of diminishing returns, then the additional worker
A) increases total output by more than the amount of previous workers. B) increases total output by the same amount as previous workers. C) decreases total output. D) increases total output by less than the amount of previous workers.
What is the dominant strategy in the prisoner's dilemma?
A) There is no dominant strategy. B) Each prisoner confesses because this is the rational action to pursue. C) Do nothing in the hope that the other prisoner will also do nothing. D) Do not confess because the other prisoner will most likely confess.
Which of the following insurance practices attempts to minimize the adverse selection problem insurance companies face?
A) prevention of fraud B) risk-based premiums C) restrictive provisions D) deductibles