Why is it difficult to estimate job gains or losses due to free trade agreements?
What will be an ideal response?
It is possible to estimate the number of workers needed to produce a given quantity of exports, and to estimate the number of jobs that would be created if imports were produced at home, but these values are not the same as job creation and destruction due to a trade agreement. Imports may supply a firm with capital or intermediate goods that make the firm more competitive and better able to survive; and exports may supply a firm that previously produced the entire value of its goods at home but after offshoring some production, it exports to its foreign affiliate. Hence, some imports create jobs, while some exports exist only because jobs at home have been moved abroad. Thus it is not really possible to determine the number of jobs that would exist without the free trade agreements, and so there is no real basis for comparison.
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Which statement is true?
A. William Julius Wilson and Charles Murray are basically in agreement about the causes of the formation of a permanent underclass. B. The permanent underclass has more white members than black members. C. There is very little evidence to show that there is actually a permanent underclass. D. There are more poor whites than poor blacks in the United States.
Under what conditions is it likely that the labor supply curve may become backward bending? What roles do the income and substitution effects play?
What will be an ideal response?
If the price of a complement for tires decreases, all else equal,
A. demand for tires will decrease. B. demand for tires will increase. C. quantity demanded for tires will decrease. D. quantity supplied for tires will decrease. E. supply for tires will increase.
In a voluntary contributions experiment described at the end of the chapter, the chump is the individual who:
A. is systematically exploited by others. B. contributes money to fund a public good equal to the benefits they ultimately receive. C. free-rides. D. contributes money to fund a public good much less than the benefits they ultimately receive.