Exam 4: Specific Factors and Income Distribution

-Refer to the production possibility graph above. Assume that the economy is in equilibrium at point e. If the labor supply increases due to immigration, the new equilibrium is most likely to be

A factor of production that cannot be used outside of a particular sector of an economy is a(an)

International trade can have important effects on the distribution of income because

The slope of a country's production possibility frontier is equal to ________ and the optimal production point is located where the slope is equal to ________. Assume that output of good Y is measured on the vertical axis, output of good X is measured on the horizontal axis, MPL is the marginal product of labor with a subscript indicating which good, P is the price of a good, and w is the wage rate.

The degree of a factor's specificity is inversely related to

The specific factors model was developed by

-Refer to the production possibility graph above. Assume that the economy is in equilibrium at point e. If the price of good A increases, the new equilibrium is most likely to be

The specific factors model assumes that there are ________ goods and ________ factor(s) of production.

International trade can have important effects on the distribution of income because

In the specific factors model, the effects of trade on welfare overall are ________ and for fixed factors used to produce the exported good they are ________.

In the specific factors model, labor is defined as a(an)

A country's budget constraint states that

In the specific factors model, which of the following will increase the quantity of labor used in food production?

-In the two-country model of international labor mobility

-Refer to the production possibility graph above. Assume that the economy is in equilibrium at point e. If there is an increase in the wage rate, the new equilibrium is most likely to be

U.S. imports of sugar are limited by an import quota that, according to a study updated in 2015, imposed a total cost on American consumers close to $________, or an average consumer cost of over ________ per year for every job saved in the U.S sugar industry.

Immigration into the U.S. over the past century has caused the percentage of immigrants in the U.S. population to

Those who will lose from free trade are ________ factors in sectors that produce goods that are ________.

In the specific factors model, a 5% decrease in the price of food accompanied by a 5% decrease in the price of cloth will cause ________ in the welfare of labor, ________ in the welfare of the fixed factor in the production of food, and ________ in the welfare of the fixed factor in the production of cloth.

The overall welfare effects of trade are ________ if ________.