Exam 4: Specific Factors and Income Distribution

In the specific factors model,a 5% increase in the price of food accompanied by a 0% increase in the price of cloth will cause wages to ________,the production of cloth to ________,and the production of food to ________.

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 Ricardian model of international trade demonstrates that trade can be mutually beneficial.Why,then,do governments restrict imports of some goods?

In the two-country model of international labor mobility

In the specific factors model,a country's production possibility frontier is ________ because of ________.

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 ________.

A country that does NOT engage in trade can benefit from trade only if

In the specific factors model,a 0% 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 Ricardian model of international trade demonstrates that trade can be mutually beneficial.Why,then,do governments restrict imports of some goods?

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