Assume that a large capital-abundant country trades only two goods with the rest of the world, medical equipment and corn. Medical equipment is relatively capital-intensive. An increase in the country's endowment of capital will cause the price of medical equipment relative to the price of corn to
A. rise at first and then fall.
B. fall.
C. stay the same.
D. rise.
Answer: B
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With labor migration, the destination country experiences:
A. An increase in output and a rising wage rate B. An increase in output and a falling wage rate C. A decrease in output and a falling wage rate D. A decrease in output and a rising wage rate
A consumer's marginal willingness to pay
A) changes with price. B) is equal to the marginal value to the consumer of the last unit of output. C) is the minimum price a consumer will pay for the last unit of output. D) is the first derivative of the demand curve.
A typical capital gain is experienced by
A) selling stock or a mutual fund. B) only rich people. C) only investment bankers. D) all shareholders in the United States.
In the short-run macro model, cyclical unemployment is caused by insufficient spending
a. True b. False