Which of the following would one expect if there were no trade in goods but resources were free to move among countries?
a. Labor will immigrate from the capitalabundant country.
b. Labor will emigrate to the capitalabundant country.
c. Labor will emigrate to the capitalscarce country.
d. Labor will immigrate from the capitalscarce country.
Ans: b. Labor will emigrate to the capitalabundant country.
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Quebec is capable of producing 10 pallets of wood shingles or 8 barrels of maple syrup with a unit of labor. Vermont is capable of producing 12 pallets of wood shingles or 12 barrels of maple syrup with a unit of labor. Assume that this is typical of the labor force as a whole. Which location has the absolute advantage and which has the comparative advantage, in the production of each good? Can these locations reap gains from trade?
What will be an ideal response?
Which of the following would be the best choice for the government of Paulina if it decides to increase its tax revenue?
a. Taxing a commodity with an elastic supply b. Taxing a commodity with an inelastic supply c. Reducing the tax on a commodity with an elastic demand d. Reducing the tax on a commodity with an inelastic demand
Relative to a closed economy, if Utopia opened itself to trade, domestic tile producers would
A. produce the same amount of tile. B. produce 150 fewer cases of tile. C. produce 100 fewer cases of tile. D. produce 150 more cases of tile.
We import about ______% of our oil.
A. 40 B. 50 C. 66 D. 80