In the figure above, international trade ________ producer surplus in the United States by ________
A) decreases; $2.88 billion
B) decreases; $1.92 billion
C) increases; $4.8 billion
D) increases; $3.6 billion
C
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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, so 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, wages in the shoe industry ________ and wages in the computer industry ________.
A. increase; increase B. decrease; increase C. increase; decrease D. decrease; decrease
Other things being equal, the effects of an increase in the price of computers would best be represented by which of the following?
a. A movement up along the demand curve for computers. b. A movement down along the demand curve for computers. c. A leftward shift in the demand curve for computers. d. A rightward shift in the demand curve for computers.
Do markets solve all of society's problems?
a. Yes, markets are efficient and work well under nearly all circumstances. b. Yes, markets solve the problems of production and distribution. c. No, they do not solve problems such as unemployment and inflation. d. No, they hardly solve any problems at all. e. Uncertain, economic theory has no answer to this question.
Which of the following is important if a country is going to achieve and sustain high rates of economic growth?
a. investment in physical and human capital b. improvements in technology c. institutional and policy arrangements consistent with economic efficiency d. All of the above.