Exam 4: Specific Factors and Income Distribution

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

Economists consider the effects of free trade on income distribution to be ________ important than the effects on overall welfare because ________.

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

In the four-quadrant diagram of the specific factors model, the graph in the upper right quadrant is a country's

In the specific factors model, a 5% increase in the price of food accompanied by a 1% increase 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.

In the two-country model of international labor mobility

The effect of trade on specialized employees of import-competing industries will be ________ jobs and ________ pay because they are relatively ________.

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 ________.

A country's budget constraint states that

The relative price of a unit of cloth in the small isolated country of Moribundia is 5 units of food. When the 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 8 units of food, then Moribundia will export ________ and ________ factors used in the production of ________ will benefit.

-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

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 ________.

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 cost of ________ per year for every U.S. household.

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.

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

The specific factors model was developed by

Economists consider the effects of free trade on income distribution to be ________ important than the effects on overall welfare because ________.

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

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.

Japan's trade policies with regard to rice reflect the fact that