Can U.S. manufacturing job losses be attributed to the growth of manufacturing in China?
What will be an ideal response?
The rise of Chinese manufacturing is correlated in time with the decline of manufacturing employment in the United States and Western Europe. We do not know with certainty if China's rising manufacturing sector is responsible for the decline in manufacturing in the United States and elsewhere, but cities and communities that compete directly with Chinese exports have not fared well in recent years, and that this is directly a result of Chinese exports. But it is uncertain what might have happened to manufacturing in the United States and elsewhere if China had remained isolated. The question that cannot be answered is whether manufacturing employment in high-income countries would have declined more slowly, or not at all, if China had not grown so fast. Some of the forces shaping the economies of advanced industrial nations are completely independent of China. Technological advances in manufacturing such as the increasing use of automated processes and robotics would probably have proceeded anyway. Telecommunications and transportation advances, which enable firms to locate parts of their production in different countries, would also have occurred.
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If the intended aim of the price floor set in the graph shown was a net increase in the well-being of producers, then normative analysis would conclude that:
A. the policy was effective, since surplus gained by producers through higher prices is greater than the surplus they lost through deadweight loss.
B. the policy was ineffective, since surplus gained by producers through higher prices is greater than the surplus they lost through deadweight loss.
C. the policy was effective, since surplus gained by producers through higher prices is greater than the surplus lost by consumers through higher prices.
D. there is no "right" conclusion to be reached in a normative sense, since people have different opinions concerning what constitutes a better outcome.
Refer to the above graph. A decrease in supply would best be reflected by a change from:
Point 2 to point 1 Point 3 to point 6 Point 5 to point 2 Point 5 to point 1
The amount of consumption in an economy depends:
a. Inversely on the level of saving b. Directly on the level of disposable income c. Inversely on the level of disposable income d. Directly on the rate of interest
Under an average-cost pricing policy:
A. a regulatory agency picks a price equal to a natural monopoly's marginal cost. B. a regulatory agency picks a price equal to a natural monopoly's average fixed cost. C. a regulatory agency picks a price at which a natural monopoly's demand curve intersects its average cost curve. D. firms earn economic profits greater than zero.