Using the figure above, demonstrate what happens to the composition of production (that is quantity of cloth per 1 unit of food) in Australia once trade is established between the two countries
Which country will export cloth? What happens to the relative income of workers in Australia as a result of trade? Does it increase or decrease? Would land owners in Australia lobby for or against free trade? Would land owners in Australia lobby for or against free admittance of immigrant workers?
The proportion of food to cloth will increase in the production of Australia Sri Lanka will export cloth. The relative (and real) incomes of workers will fall in Australia as a result of trade. Land Owners in Australia should lobby in favor of trade. They would also lobby for free labor mobility (of workers into Australia), since the marginal product of labor is high, the owners of land have much (Ricardian) rents to gain from an inflow of workers.
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Rent controls primarily benefit
A) property owners. B) people looking for rental units. C) builders. D) people who already occupy rental units.
A major characteristic of monopolistic competition is:
A. a relatively large number of firms selling the product. B. relatively easy entry into an industry but a relatively difficult exit from the industry. C. a high degree of collusion among firms. D. mutual interdependence.
Changes in inventories are included as part of investment spending because anything produced by a business that has
What will be an ideal response?
If exchange rates end up in the right ranges, the free market will drive each country to shift resources into those sectors in which it enjoys a comparative advantage.
Answer the following statement true (T) or false (F)