Exam 4: Specific Factors and Income Distribution

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

The overall welfare effects of trade are ________ if ________.

A country's budget constraint states that

In the specific factors model,which of the following is treated as a specific factor?

In the two-country model of international labor mobility

A factor of production that can be used in any sector of an economy is a(an)

The relative price of a unit of cloth in the small isolated country of Moribundia is 5 units of food.When then central city,Mudhole,puts in an airstrip,the country is able to engage in trade.If the relative price of cloth in the outside world is 3 units of food,then Moribundia will export ________ and ________ factors used in the production of ________ will benefit.

-Refer to the graph above.Points A,B,and C represent ________,________,and ________,respectively.

In the specific factors model,which of the following is treated as a specific factor?

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

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

In the specific factors model,a 5% increase in the price of food accompanied by a 5% increase in the price of cloth will cause wages to ________,the production of cloth to ________,and the production of food to ________.

The slope of a country's production possibility frontier with cloth measured on the horizontal and food measured on the vertical axis in the specific factors model is equal to ________ and it ________ as more cloth is produced.

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

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

-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

-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 2013,imposed a total cost on American consumers close to $________,or an average cost of ________ per year for every job saved in the U.S sugar industry.

A country's budget constraint states that

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