The Heckscher-Ohlin theory predicts that the opening of trade between a land-abundant country and a labor-abundant country should result in
A. higher wages in the labor-abundant country and higher rents in the land-abundant country.
B. higher rents and wages in both countries.
C. lower rents and wages in both countries.
D. higher rents in the labor-abundant country and higher wages in the land-abundant country.
Answer: A
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Consider the demand for labor in the computer chip industry. The demand for labor
A) is derived from the demand for computer chips. B) is shown by a perfectly elastic demand for labor. C) is shown by a perfectly inelastic demand for labor. D) has a demand curve that is backward bending.
When firms incur unplanned inventories, they typically
a. build new plants. b. call for more government spending. c. hire more workers and increase production. d. lay off workers and reduce production.
A firm sells 1000 units per week. It charges $70 per unit, the average variable costs are $25, and the average costs are $65 . At what price would the firm consider shutting down in the long run?
a. $10 b. $25 c. $65 d. $70
If a product's price increases, quantity: a. supplied increases
b. supplied decreases. c. supplied does not change, but supply does increase. d. demanded increases.