Exam 4: Specific Factors and Income Distribution

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

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

A country's budget constraint states that

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

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 ________.

-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 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.

In modern economies,