Is it possible that trade could prevent the development of new and more efficient industries?
What will be an ideal response?
Yes, under certain circumstances. Using the textbook example, suppose that Europeans are potentially more efficient at making commercial aircraft than Americans. Their potential can only be realized, however, after a period of experimentation and development. The initial problem they face is that the efficiency advantage goes to the United States because of its better developed linkages between suppliers and producers. The availability of existing planes at a cost that is lower than initial costs will be in the European industry may deter the development of the industry.
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The impact of a decrease in the wage rate on labor supply will be represented by ________, assuming all else equal
A) a rightward shift of the labor supply curve B) an upward movement along the labor supply curve C) a leftward shift of the labor supply curve D) a downward movement along the labor supply curve
By the summer of 2008, about what percent of subprime mortgages were overdue by at least 30 days?
A) 10% B) 25% C) 34% D) 50%
Forcing a natural monopolist to produce where price equals marginal cost results in an economic loss to the monopolist
Indicate whether the statement is true or false
If the inflation rate turns out to be greater than was is expected to be, the clear losers are
A. businesses. B. people on incomes adjusted by a COLA. C. borrowers. D. lenders.