Initially, workers in the shoe industry and the computer industry earn the same wage. Reductions in trade barriers give domestic consumers access to cheaper shoes produced abroad, which causes domestic shoe prices fall. At the same time, foreign consumers purchase more computers, raising the relative price of computers. As a result of these changes, the demand for labor in the shoe industry ________ and the demand for labor in the computer industry ________.
A. increases; increases
B. decreases; decreases
C. increases; decreases
D. decreases; increases
Answer: D
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Which of the following people would be classified as employed in the Current Population Survey?
A) Rich, who is working 20 hours a week but wants a full-time job B) Misty, who just quit her job to return full time to school C) April, who just graduated from college and is looking for work D) Jason, who was laid off from work less than 6 months ago but who has stopped looking for work E) Laura, who is unpaid but is working 10 hours a week in the family business she and her husband run
A monopoly, unlike a perfect competitor, has total control in its market because it is the single producer. Why, then, must a single-price monopoly decrease its price if it wants to increase its output?
What will be an ideal response?
Travel services include purchases of items by residents of one country when they travel to another country
Indicate whether the statement is true or false
The permanent income hypothesis highlights the phenomenon of ________
A) the intertemporal budget constraint B) a binding borrowing constraint C) autonomous consumption D) consumption smoothing