The text argues that if avocado growers in Mexico can produce avocadoes cheaper than avocado growers in the United States, this will not reduce total jobs available in the United States. The logic underlying this argument is that
A. avocado growers in Mexico need the jobs more than Americans do.
B. avocado growers in the United States will switch to specializing in a crop in which they hold the comparative advantage.
C. avocado growers in the United States did not earn much anyway.
D. avocado growers in the United States are welcome to emigrate to Mexico.
Answer: B
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Employees at the hospital have negotiated a 3 percent increase in wages for the next year, based on their inflation expectations. If inflation is actually 5 percent over the next year, which of the following will occur?
A) Real wages for hospital employees will fall. B) The increase in inflation is expected. C) Inflation will be 3 percent the following year. D) Unemployment of hospital employees will rise.
Suppose consumer confidence improves and as a result, consumer spending increases by $50 billion dollars. Assume households spend $0.80 of each extra dollar of income and save the remaining $0.20
Other things equal, calculate by how much spending will increase during: a. the first round through the circular flow. b. the second round through the circular flow. c. the third round through the circular flow. d. the fourth round through the circular flow.
Which of the following is NOT a part of the Federal Reserve System?
A. the Board of Governors B. the Twelve District Federal Reserve banks C. the Federal Deposit Insurance Corporation D. the Federal Open Market Committee
A monopolist's marginal revenue curve is
A. the same as a perfectly competitive firm's marginal revenue curve. B. higher than the monopolist's demand curve. C. a horizontal line at the market price. D. below the firm's demand curve.