Your roommate Hansen argues that American producers cannot compete with foreign producers because wages are lower in foreign countries than in the United States. Hansen
A) is incorrect. Free trade raises living standards by increasing economic efficiency.
B) is right in asserting the need to protect high wages if the United States wishes to maintain its high standard of living.
C) is correct in arguing that the high wages of U.S. workers make it impossible to compete with workers in low-wage countries.
D) is advancing the anti-dumping argument for protectionism.
Answer: A
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If firms meet together to decide on prices and outputs, it is called: a. collusion
b. oligopolistic competition. c. price leadership. d. a pricing conglomerate.
In what sense is it a cost that people must spend time and resources coping with inflation?
a. Because the loss of time and resources frustrates people unnecessarily b. Because the time and resources could have been used to produce something else instead c. Because the time and resources could have been wasted elsewhere d. Because the time and resources are a sunk cost e. Because the time and resources are insufficient to cope with the problem
Which of the following is a distinguishing feature of a natural monopoly?
a. A rising average total cost curve b. A declining average total cost curve c. A declining marginal cost curve d. A vertical average total cost curve
Derived demand means
A) the labor demand curve will be upward sloping. B) labor demand is derived from demand for the product it produces. C) labor demand will shift about in a random fashion. D) labor demand is determined by the supply of labor.