Suppose that U.S. firms outsource computer manufacturing jobs to China, it is expected that
A) the wage rate for workers manufacturing computers will decrease in the U.S. but increase in China.
B) the wage rate for workers manufacturing computers will increase in the U.S. but decrease in China.
C) the wage rate for workers manufacturing computers will increase in both the U.S. and China.
D) the wage rate for workers manufacturing computers will decrease in both the U.S. and China.
Answer: A
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Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting downward C. Aggregate demand shifting rightward D. Aggregate demand shifting leftward
The price elasticity of the supply of teenage labor services is approximately 1.36. Suppose the minimum wage rises from $7.25 per hour to $8.75. Using the midpoint formula, what is the approximate change in the quantity of teenage labor supplied?
A) 7.3 percent B) 14.4 percent C) 25.5 percent D) There is insufficient information to answer the question.
If a Canadian firm opens a production facility in the United States, the profits from this production facility received by the Canadian owners of the firm in exchange for the factors of production they supply will be included in the
A) gross domestic product of Canada. B) gross national product of the United States. C) gross national product of Canada. D) exports from Canada and imports to the United States.
In an oligopoly, following a rival’s decrease in price tends to eliminate the
a. income effect. b. substitution effect. c. multiplier effect. d. random effect.