Consider two products, automobiles and shoes. If shoes are labor intensive and automobiles are capital intensive, what can we expect in freetrade conditions?
a. The relative price of automobiles in the autoexporting country will decrease.
b. The relative price of shoes in the shoeexporting country will increase.
c. The capitalabundant country will produce more shoes.
d. The laborabundant country will produce more automobiles.
Ans: b. The relative price of shoes in the shoeexporting country will increase.
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Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________, 
A. Rising; B; C B. Falling; A; C C. Falling; A; B D. Rising; A; C
The imposition of a tariff will typically ________ government revenue and ________ domestic production of the good
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease E) increase; not change
In a perfectly competitive market, technological advances bring ________ economic profits for producers and ________ lower prices for consumers
A) permanent; permanently B) permanent; temporarily C) temporary; permanently D) temporary; temporarily
A typical firm in a cartel will hold which of the following attitudes?
A) If everyone cheats, I'm better off, and so is everyone in the cartel. B) If I alone cheat, I'm better off; if everyone cheats, I'm worse off. C) I can never do better for myself than following agreed-upon cartel rules. D) If I suspect others are planning to cheat, I'll do best for myself by deciding not to cheat.