Immigration has the potential to shift the national supply curve for labor to the ________ and the national demand curve for labor to the ________.
A. left; left
B. left; right
C. right; right
D. right; left
Answer: C
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In an open economy with strong international trade, increases in government spending are likely to have an overall "crowding out" effect
Indicate whether the statement is true or false
Suppose a large firm allows its employees to choose whether to participate in its health insurance plan
The firm is trying to decide between two plans: Plan I has a low monthly premium but a high deductible, and Plan II has a high monthly premium but a low deductible. Under which plan is adverse selection likely to be a bigger problem? A) Plan II because it is likely to draw participants who expect high medical costs. Healthy individuals who do not expect to consume much health care services will not be willing to pay the high premiums. B) Plan II because it is likely to draw employees who tend to over-consume health care services because of the low deductible. Insurance companies are likely to end up paying out more claims than the premiums they collect. C) Plan I because it is likely to draw the relatively healthy employees who do not expect to spend much on health care. Because the monthly premiums are low, the insurance company has to bear a bigger financial burden in the event of serious illnesses. D) Plan I because it is likely to draw participants who expect high medical costs. This group expects to consume much health care services and therefore prefer low deductibles.
The principle of comparative advantage does not provide answers to certain questions. One of those questions is
a. Is it possible for specialization and trade to benefit more than one party to a trade? b. Is it possible for specialization and trade to increase total output of traded goods? c. Do opportunity costs play a role in people's decisions to specialize in certain activities? d. What determines the price at which trade takes place?
When net exports are negative, there is a trade ___________.
Fill in the blank(s) with the appropriate word(s).