Suppose that Spain has a comparative advantage in hats and Portugal has a comparative advantage in doormats. Under a system of free trade, each country specializes and then trades with the other. If the price increases from four hats per doormat to five hats per doormat,
a. people in Portugal will not want to buy as many hats
b. Spain no longer has a comparative advantage in hats
c. Portugal no longer has a comparative advantage in doormats
d. some of the gains from trade shift to Portugal
e. some of the gains from trade shift to Spain
D
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Self-selection
A. increases the turnover costs of a firm. B. increases the compensating wage differential. C. reduces the compensating wage differential. D. increases the number of qualified applicants for a job.
By excluding discouraged workers from the labor force,
A. the unemployment rate would fall. B. labor productivity increases. C. the unemployment rate would rise. D. the unemployment rate stays the same.
Who does not gain when a tariff is imposed?
A. Domestic producers of the good. B. Domestic workers in the protected industry. C. Domestic consumers of the good. D. Domestic suppliers in the protected industry.
The firm's short-run supply curve begins at an output of
A. 0.
B. 40.
C. 45.
D. 50.