Using the specific factors model, assume that strawberry production requires the specific factor of land, tractor production requires the specific factor of capital, and labor is variable. If the United States is capital abundant compared to Mexico, and Mexico is land abundant compared to the United States, then in the short run with trade, which of the following is true?
A) Mexican wages will rise more than the increase in the price of tractors in Mexico.
B) U.S. wages will rise less than the fall in the price of tractors in the United States.
C) The owners of capital in the United States will see a larger increase in their incomes in percentage terms than the increase in the price of tractors.
D) The owners of land in Mexico will see a smaller increase in their incomes in percentage terms than the increase in the price of strawberries.
C
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Which set of goals can, at times, conflict in the short run?
A) high employment and economic growth B) interest rate stability and financial market stability C) high employment and price level stability D) exchange rate stability and financial market stability
An increase in the price of a substitute shifts the demand curve to the _______
a. right b. left c. it does not change the demand curve d. none of the above
When the price is $2
A. quantity supplied is greater than quantity demanded and, therefore, price must rise to get to equilibrium.
B. quantity supplied is less than quantity demanded and, therefore, price must fall to get to equilibrium.
C. quantity demanded is greater than quantity supplied and, therefore, price must rise to get to equilibrium.
D. quantity demanded is greater than quantity supplied and, therefore, price must fall to get to equilibrium.
Which one of the following statements is TRUE?
A. The shape of the Keynesian short-run aggregate supply curve is based on the conclusion that there is no correlation between the level of real GDP and the employment level. B. The shape of the Keynesian short-run aggregate supply curve is based on the conclusion that domestic workers are harmed by imports. C. The shape of the Keynesian short-run aggregate supply curve is based on the conclusion that increases in aggregate demand will increase the price level, but will leave real GDP unaffected in the short term. D. The shape of the Keynesian short-run aggregate supply curve is based on the conclusion that increases in aggregate demand can boost output in the short term.