Refer to above figure. Would you expect to find that the real wages become equalized in both countries? Explain the reason for any differences you note
What will be an ideal response?
We would expect that one single relative wage will be established for both countries. This happens because the two countries do not differ in relative factor availability by much, and hence a zone of overlap exists which allows for this result.
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The return on wealth (both human and nonhuman) is
A) a stock variable. B) income. C) measured in the form of bonds. D) a stock or flow variable depending upon whether the wealth is in the form of bonds or other financial assets.
Regulations to reduce pollution
a. cause pollution levels to drop below the regulated amount. b. are typically a more costly solution to society than a corrective tax. c. allow firms with the lowest cost to reduce pollution by more than those with the highest costs. d. are a better solution for the environment than a corrective tax.
The risk-free rate is not:
A. usually approximated by interest rate on corporation debts. B. lower than any other interest rate. C. usually approximated by interest rates on U.S. government debt. D. the interest rate at which one would lend if there were no risk of default.
When estimating a regression line, a high R2‚ tells us we have
A) a good fit. B) large residuals. C) correctly determined the direction of causation. D) all of the above E) none of the above