Why would the establishment of protective trade barriers be a poor way of protecting workers in domestic industries?
What will be an ideal response?
First, protective barriers invite retaliatory trade actions by foreign countries, which can reduce exports and lower employment in exporting industries. Second, since consumer prices rise with the imposition of trade barriers, domestic workers in their role as consumers are worse off. Third, the best way to maximize the incomes of domestic workers is to allow them to specialize in what they do best (i.e., most efficiently) and trade freely.
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The supply of public goods must be left to government and nonprofit institutions. Why?
What will be an ideal response?
Consider budget constraints A and B in the graph shown. The slope of A compared to the slope of B:
A. is steeper, showing that movie tickets are relatively more expensive in line A.
B. is flatter, showing that books are relatively less expensive in line A.
C. shows that the opportunity cost of books is smaller in line A.
D. shows that the opportunity cost of books is greater in line A.
Heterogeneity and the dynamic nature of labor markets are the principal causes of ________ unemployment.
A. frictional B. structural C. cyclical D. chronic
Which statement is true?
A. The monopolistic competitor has a perfectly elastic demand curve. B. The monopolistic competitor may make a profit in the long run. C. The monopolistic competitor operates at the minimum point of her ATC curve. D. None of these statements are true.