Assume the standard trade model with two countries (Alpha and Beta), two goods (food and drink), and two factors of production (land and labor). Further assume that Alpha is relatively labor-abundant and food is relatively land-intensive. The no-trade wage rate relative to land rents in Alpha is ________ the relative wage rate in Beta.
A. double
B. equal to
C. greater than
D. less than
Answer: D
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What will be an ideal response?
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Indicate whether the statement is true or false
One result of a tax, regardless of whether the tax is placed on the buyers or the sellers, is that the
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A. fewer workers but at a higher wage than it would in the absence of the union. B. fewer workers but at a lower wage than it would in the absence of the union. C. the same number of workers but at a lower wage than it would in the absence of the union. D. the same number of workers but at a higher wage than it would in the absence of the union. E. more workers and at a higher wage than it would in the absence of the union.