Trade in services such as information technology
A) is like other trade, it creates winners and losers, but the gains for national economies likely outweigh the costs.
B) creates gains for India's economy, but national welfare losses for the countries that import these services.
C) make it highly likely that information technology jobs will ultimately disappear in the industrialized countries.
D) is not perceived as threatening by industrialized countries so is unlikely to lead to any protectionist sentiment or pressures in the way the manufacturing does.
A
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Suppose that two clothing manufacturers, Frederick's Fashions and Stephan's Styles, announce that they plan to merge. The Herfindahl-Hirschman index is currently 1,500. After the merger, the HHI will rise to 1,560. This market is
A) highly concentrated and so the government will definitely challenge the merger. B) moderately concentrated and because the merger increases the HHI by more than 50 points, the government will definitely challenge the merger. C) moderately concentrated, but because the merger increases the HHI by less than 100 points, the government will probably not challenge the merger. D) competitive and so the government will not challenge the merger.
Wes works as a delivery man and can work as many hours as he likes for $12 an hour. He typically works 40 hours a week. Recently, his pay has been cut, and Wes decides to work:
A. more hours, because the price effect dominates his labor supply decision. B. less hours, because the income effect dominates his labor supply decision. C. more hours, because the income effect dominates his labor supply decision. D. the same amount, because the price effect dominates his labor supply decision.
If you were a Keynesian, you would
a. accept the countercyclical policy of doing nothing, that is, allow market forces to work b. believe that the level of aggregate demand in the 1930s was sufficient to generate full employment c. accept the fact that policymakers should eliminate inflation first before focusing on unemployment d. focus on increasing aggregate demand in order to stimulate the economy e. argue in favor of supply side economics
Which of the following factors weakens the case for private-sector provision of goods and services as opposed to public-sector provision?
a. weak incentives for operational efficiency b. rent-seeking c. the shortsightedness effect d. externalities