Compare how exports and imports affect consumers and producers in a domestic economy.
What will be an ideal response?
Answers will vary but should include reference to consumer losses in the form of higher prices when exports are allowed and producer losses when imports enter the market through free trade. Exports raise the price of goods to that of the world price equilibrium, which is higher than the domestic equilibrium. This increases producer surplus but takes away from consumer surplus. The losses to consumers are offset by producer gains. Imports, on the other hand, hurt domestic producers but these losses are made up for by the benefits to consumers of lower-priced goods entering the market.
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A. Decreased supply of Disneyland tickets B. Increased demand for Disneyland tickets C. Decreased demand for Disneyland tickets D. Increased supply of Disneyland tickets
A sequential game can be used to analyze whether a retail firm should build a large store or a small store in a city, when the correct choice depends on whether a competing firm will build a new store in the same city. Which of the following is used to analyze this type of decision?
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Briefly explain the Heckscher-Olin (H-O) Theory.
What will be an ideal response?
The immigration of skilled scientists and engineers from other nations will have which of the following effects?
A. The supply curve for innovative activities will be pushed to the right, increasing the amount of innovation. B. The demand curve for innovative activities will be pushed to the left, decreasing the amount of innovation. C. The demand curve for innovative activities will be pushed to the right, increasing the amount of innovation. D. The supply curve for innovative activities will be pushed to the left, increasing the amount of innovation.