One of the predictions of the HO model is that
A) countries with different factor endowments but similar technologies and preferences will have a strong basis for trade with each other.
B) countries will tend to specialize, but not completely, in their comparative advantage good.
C) reciprocal demand leads to an equilibrium terms of trade by inducing changes in both demand and supply.
D) All of the above.
D
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The marginal product of labor (measured in units of output) for Expando Corp is given by MPN = A(400 - N)
where A measures productivity and N is the number of labor hours used in production. Suppose the price of output is $3 per unit and A = 2.0. What will be the demand for labor if the nominal wage is $18? A) 57 B) 107 C) 197 D) 397
The fact that at the competitive equilibrium nobody can be made better off without making someone else worse off implies that
A) the equilibrium is pareto efficient. B) the equilibrium is not pareto efficient. C) the prices need to adjust further. D) further gains from trade are possible.
If the current margin is greater than the desired margin, the firm should
a. Increase production b. Decrease production c. Not change production level d. Production ceases
Which of the following monetary policies would be appropriate to close a recessionary gap?
What will be an ideal response?